Business
Inventory Cash Flow Calculator
Project sales across the horizon, calculate gross profit and inventory purchases independently, then reconcile their combined effect on cash.
Opening-month gross profit-
Opening-month inventory purchases-
Opening-month inventory cash contribution-
Sales through forecast horizon-
Gross profit through forecast horizon-
Inventory purchases through forecast horizon-
Net inventory cash contribution through horizon-
Estimated ending cash-
Decision view
Inventory profit-to-cash bridge
Inventory profit-to-cash bridgeForecast gross profit is reconciled through purchases and fixed inventory costs before the effect on opening cash is shown.
Exact scenario comparisonMonthly sales growth (%) changes while all other entered assumptions remain constant.
| Monthly sales growth (%) | Opening-month gross profit | Opening-month inventory purchases | Opening-month inventory cash contribution | Sales through forecast horizon | Gross profit through forecast horizon | Inventory purchases through forecast horizon | Net inventory cash contribution through horizon | Estimated ending cash |
|---|
Period-by-period detail
Monthly inventory cash-flow schedule
How to use Inventory Cash Flow Calculator
- Use sales and purchase assumptions from the same product scope.
- Confirm whether purchase rate represents cash paid, not merely inventory received.
- Compare ending cash with supplier terms, reorder commitments, and minimum operating cash.
Calculator guide
Understanding Inventory Cash Flow Calculator
Inventory can produce accounting profit while consuming cash. This forecast keeps sales margin, purchase outflow, fixed inventory cost, and opening cash separate.
Calculation method
How the calculation works
Project monthly inventory sales, gross profit, cash purchases, and fixed inventory costs separately, then reconcile their cumulative effect on cash. Grow monthly sales, sum the series, apply gross margin and purchase shares separately, subtract monthly fixed inventory costs, and add the net contribution to opening cash.
Working-capital check
Know when this forecast needs a schedule
A percentage model is a first screen, not a substitute for purchase orders and payment dates.
Worked situations
Practical examples
- A positive gross margin does not guarantee positive cash contribution when purchases and fixed costs are larger.
- Sales growth increases both gross profit and modeled purchases.
- Ending cash equals opening cash plus the cumulative inventory cash contribution.
Better inputs
Useful tips
- Run a slower-sales and higher-purchase case.
- Separate seasonal buys into a detailed cash schedule.
- Reconcile the first modeled month to bank activity.
Before relying on the result
Limitations and common mistakes
- Receivable timing, supplier terms, taxes, shrinkage, stockouts, financing, returns, and non-inventory cash flows are excluded.
- Sales growth is constant.
- The purchase share is treated as same-period cash outflow.
Reference
Key terms
- Gross margin
- Sales remaining after product cost under the entered margin.
- Purchase rate
- Modeled inventory cash purchases as a share of sales.
- Net cash contribution
- Gross profit less purchases and fixed inventory costs.
- Ending cash
- Opening cash plus modeled inventory contribution.
Important note
Calculated from the entered values using the displayed accounting method. Reconcile material decisions with source records and applicable accounting policy.
Frequently asked questions
Why can ending cash fall during sales growth?
Purchase and fixed cash outflows can exceed gross profit.
Is inventory on hand valued here?
No. This is a cash-flow model, not a balance-sheet valuation.
Are supplier credit terms included?
No. Entered purchases are treated as same-period cash outflow.
Should tax be added?
Yes, in a more complete cash forecast.