Indirect cash flows involve an understanding of cash flows from operations, investing, and financing activities. Direct cash flows involve isolating cash inflows from cash outflows.

In this introduction to cash flow forecast and liquidity management, we'll explore the differences and benefits of each approach.

We'll go through a crash course of intelligent and powerful Excel (and Google Sheets) functionality that will be leveraged to build a dynamic forecast model.

We cover commonly-used functions as well as some of the new dynamic array functions and lookups that can be used to save time and eliminate mistakes.

After learning the nuances of direct vs. direct cash flow modeling and the functions necessary to build them, we'll cover the smart practices to implement for managing, presenting, and sensitizing models.

We'll cover the different cash flow models you may see in turnaround, restructuring, bankruptcy, FP&A, treasury, M&A, and management consulting.

Research shows that people learn best by doing. We'll roll up our sleeves and introduce a real-life business case that will serve as the foundation for our financial model, supporting schedules, and financial and operating recommendations.

We won't just play around with made up exercises. We'll go through scenarios you may encounter in your work.

We'll examine the sales team's revenue forecast and challenge their assumptions. We'll review customer types and determine the right way to model them, considering their risk, terms, and the need for accuracy.

Then we'll model collections of credit sales based upon agreed-upon-terms, anticipated collections of AR aging, and doubtful accounts.

We'll analyze direct costs, inclusive of materials, labor, fixed and variable overheads. We'll determine what the forecast needs to look like given expectation of sales and operating improvements.

We'll then make assumptions about payments to vendors based upon agreed-upon terms, classification of critical vendors, and payment negotiations.

Next, based upon the growth or contraction of the business, we'll forecast inventory activity from raw material acquired, to work-in-process, to finished goods and sale through COGS.

We'll address changes the company can make to improve its inventory conversion process as well as alternatives for more effective purchasing.

More nuanced line-item categories, including prepaid and accrued expenses, require an understanding of how certain expenses are paid for in cash and accounted for in the financial statements.

We'll explore prepaid expenses, such as software and insurance, and accrued expenses, such as professional fees, and how to model them correctly.

Payroll, benefits, and payroll taxes can be challenging to model due to their timing. We'll discuss the different ways payroll, benefits, bonuses, and taxes are accrued and paid out.

We'll review the P&L forecast for expenses such as rent, auto expenses, professional fees, insurance, utilities, and more and how they are paid.

We'll model them in cash and affirm that any updates to the P&L forecast will be correctly coded to the cash flow forecast.

One of the key reasons for forecasting cash flow is to ensure the company is on a path of healthy liquidity. In the event of default, the company may find itself in a forbearance, Chapter 11, or Chapter 7.

Modeling term debt, a revolving line of credit, interest expense, and other forms of financing ensures the company know it isn't exposed.

Once the model is pieced together, we'll review what it tells us about the business. We'll identify the sources of distress and opportunity. We'll agree upon courses of action to remedy the situation.

By running scenarios, we can go to the lenders and investors and share with them the plan for right-sizing the business and getting back on track.

It's one thing to put together a 13-week cash flow model. But it's another to build it so well that it can be seamlessly updated for new data, new time periods, and extended into the future with little concern for breakage.

We'll integrate the 13-week cash flow with a long-term forecast model and discuss the ways we can maintain their integrity.

Networking doesn't stop there. You'll join Carl's private CFO and FP&A community where you can keep in touch with other attendees, ask and answer a wide array of questions, share techniques and best practices, and refer business. This community is only open to former clients and attendees of Carl's programs.