Finance Lab
Cash forecast under stress
Compare the same forecast with sales down, costs up and customers paying later, so the funding gap is visible before it happens.
The base forecast is run, then run again with revenue moved by the shock entered, overheads moved by the shock entered and the collection delay extended. The difference between the two is the cash effect of the shock.
Step 1 · Enter your figures
Every box starts with an example figure. Replace each one with your own — the result updates as you type. Nothing you type is sent anywhere or stored.
Sales invoiced in a normal month today, excluding GST.
The rate revenue changes each month. Enter a negative figure if it is falling.
Gross profit as a percentage of revenue, after the direct cost of delivering the work.
Wages, rent, marketing and overheads in a normal month, excluding the direct cost of sales.
The rate overheads change each month.
The cash you are actually starting from, net of any overdraft already drawn.
Principal and interest paid each month on all facilities.
The rate you set aside on operating profit. Confirm the rate that applies to your structure.
Months between invoicing and the cash arriving. Enter 0 if you are paid on delivery.
How far forward to run the forecast.
The fall in sales you want to test, held for the whole period.
The rise in overheads you want to test.
Extra months added to the collection delay under stress.
Step 2 · Read the result
Lowest cash under stress
-$84,350
Reached in month 12.
- Lowest cash on the base case
- $32,000
- Cash the shock costs you
- $116,350The additional cash needed to reach the same low point as the base case.
- Month cash first runs out under stress
- 2.0 monthsFunding must be arranged before this month.
- Closing cash under stress
- -$84,350
- Lowest cash on the base case$32,000
- Cash the shock costs you$116,350
- Month cash first runs out under stress2.0 months
- Closing cash under stress-$84,350
What this answer rests on (17)
- Monthly revenue now$120,000
You entered this
Sales invoiced in a normal month today, excluding GST.
- Monthly revenue growth1.0%
You entered this
The rate revenue changes each month. Enter a negative figure if it is falling.
- Gross margin45.0%
You entered this
Gross profit as a percentage of revenue, after the direct cost of delivering the work.
- Monthly operating costs$42,000
You entered this
Wages, rent, marketing and overheads in a normal month, excluding the direct cost of sales.
- Monthly cost growth0.5%
You entered this
The rate overheads change each month.
- Cash in the bank today$80,000
You entered this
The cash you are actually starting from, net of any overdraft already drawn.
- Monthly loan repayments$6,000
You entered this
Principal and interest paid each month on all facilities.
- Tax set aside on profit25.0%
You entered this
The rate you set aside on operating profit. Confirm the rate that applies to your structure.
- Collection delay1.0 months
You entered this
Months between invoicing and the cash arriving. Enter 0 if you are paid on delivery.
- Months to forecast12.0 months
You entered this
How far forward to run the forecast.
- Revenue falls by20.0%
You entered this
The fall in sales you want to test, held for the whole period.
- Overheads rise by5.0%
You entered this
The rise in overheads you want to test.
- Customers pay later by1.0 months
You entered this
Extra months added to the collection delay under stress.
- The shock applies for the whole period; no recovery is assumed.
The calculator applied this
- Margin is unchanged under stress — the fall is in volume, not price.
The calculator applied this
- Loan repayments and the tax set-aside rate are unchanged under stress.
The calculator applied this
- Revenue and overheads move at the constant monthly rates entered, with no seasonality.
The calculator applied this
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Save to my workspaceRead this before you rely on the result
- Lowest cash under stress is negative at -$84,350. On these figures the outcome is a shortfall, not a return.
- Closing cash under stress is negative at -$84,350. On these figures the outcome is a shortfall, not a return.
What this means for you
How much cash a downturn actually costs you, and how much earlier it would run out.
How to read it
- The cash the shock costs you is the size of the buffer or facility that would carry you through it.
- Compare the two low points, not the two closing balances.
- Run the shock at a level you have actually lived through before, not a level you can comfortably survive.
Watch out for
- Assuming overheads fall with sales. Most do not, at least not quickly.
- Testing one shock at a time. Slow sales, later payment and rising costs usually arrive together.
- Relying on a facility being available when the shock happens. Lenders reprice exactly when you need them.
Assumptions behind this result
- The shock applies for the whole period; no recovery is assumed.
- Margin is unchanged under stress — the fall is in volume, not price.
- Loan repayments and the tax set-aside rate are unchanged under stress.
- Revenue and overheads move at the constant monthly rates entered, with no seasonality.
General information only. This calculator does not take your circumstances into account and is not financial, tax, legal or investment advice. Confirm every rate, threshold and figure with your own adviser before acting.
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Other tools in cash and trading.
Take this further
Members run this calculator on their own recorded figures, save the workings to their workspace, export them to Word or Excel, and read the lessons that teach the thinking behind the result.