Inventory Investments in QuickBooks' Business Plan Workbook - dummies

Inventory Investments in QuickBooks’ Business Plan Workbook

By Stephen L. Nelson

The Inventory Investments figures show the change in the inventory balance for each forecasting period. This amount increases when the inventory sold is less than the inventory acquired. This amount decreases when the inventory sold is more than the inventory acquired. By recognizing the changes in this account balance, the model recognizes the cash effects of changing inventory balances.

The Inventory Investments figure for each period is the difference between the Inventory balance at the end of the previous period and the balance at the end of the current period. For example, the formula for the first period is

=C45 – B45

The formula for the second period is

=D45 – C45

and so on.

Other Current Assets Investments

The Other Current Assets Investments figures show the changes in the Other Current Assets balance for the period. This amount increases when, either directly or indirectly, cash is used to acquire current assets. This amount decreases when, either directly or indirectly, cash is generated by converting current assets to cash.

The Other Current Assets Investments figure for each period is the difference between the Other Current Assets balance at the end of the previous period and the balance at the end of the current period. For example, the formula for the first period is

=C46-B46

The formula for the second period is

=D46 – C46

and so on.

Plant, Property, & Equip Investments

The Plant, Property, & Equip Investments figures show the change in the Plant, Property, & Equipment balance for the period. This amount increases when, either directly or indirectly, cash is used to acquire plants, property, and equipment. This amount decreases when, either directly or indirectly, cash is generated by converting plants, property, and equipment to cash.

The Plant, Property, & Equip Investments figure for each period is the difference between the Plant, Property, & Equipment balance at the end of the previous period and the balance at the end of the current period. For example, the formula for the first period is

=C48 – B48

The formula for the second period is

=D48 – C48

and so on.

Other Noncurrent Assets Investments

The Other Noncurrent Assets Investments figures show the changes in the Other Noncurrent Assets balance for the period. This amount increases when, either directly or indirectly, cash is used to acquire other noncurrent assets. This amount decreases when, either directly or indirectly, cash is generated by converting other noncurrent assets to cash.

The Other Noncurrent Assets Investments figure for each period is the difference between the Other Noncurrent Assets balance at the end of the previous period and the balance at the end of the current period. For example, the formula for the first period is

=C51 – B51

The formula for the second period is

=D51 – C51

and so on.

Other Owner Equity Changes

The Other Owner Equity Changes figures show the cash flows stemming from any additional capital contributions made by the owners to the business or from dividends and other distributions made by the business to the owners. The Other Owner Equity Changes figure for each period is the value that you enter in the inputs area of the business planning starter workbook.

The Other Owner Equity Changes figures are pulled into the Uses of Cash section as negative values because of the following: A positive change in the owner’s equity, such as an additional capital contribution (from a stock offering, for example), doesn’t use cash but provides cash.

Net Cash Generated (Used)

The Net Cash Generated (Used) figures show the total cash flow for each period of the forecasting horizon, based on the listed sources and uses of cash. The amount for each period is the sources of cash for the period less the uses of cash for the period. For example, the formula for the first period is

=SUM(C145:C151) – SUM(C154:C159)

The formula for the second period is

=SUM(D145:D151) – SUM(D154:D159)

and so on.

Ending Cash Balance

The Ending Cash Balance figures show the forecasted cash and equivalents balance at the end of each period. The balance is the Beginning Cash Balance figure for the period plus the Net Cash Generated (Used) figure for the period. For example, the formula for the first period is

=C142+C160

The formula for the second period is

=D142+D160

and so on.