Class 11 Entrepreneurship Notes · CBSE
Cash Flow Projections
Cash Flow Projections — learn to project monthly cash inflows and outflows, track closing balances, and spot cash deficits before they happen. CBSE Class 11 Entrepreneurship notes with the Savitha Sari Shop 6-month case study.
Last updated: 10 Sep 2026
Notes
Month-by-Month Calculations (Month 0–6)
Given
Own savings ₹ 20,000; bank loan ₹ 1,00,000. Assets/setup ₹ 90,000.Buy 72 saris @ ₹ 125 = ₹ 9,000; packing 72 × 12.50 = ₹ 900; freight = ₹ 900.Credit sale money comes in the following month.Fixed expenses/month: salary ₹ 3,000 + rent ₹ 1,500 + utilities ₹ 500 + interest ₹ 1,000 + phone ₹ 500 + office ₹ 1,000 = ₹ 7,500.Commission = 10% of total sales (cash + credit) of the month.
Month 0 — Setup
1/7
Inflow
₹ 1,20,000
Outflow
₹ 1,00,800
Surplus / (Deficit)
+ ₹ 19,200
Closing Balance
₹ 19,200
Inflow: ₹ 20,000 (own savings) + ₹ 1,00,000 (bank loan) = ₹ 1,20,000 Outflow: ₹ 90,000 (assets/setup) + ₹ 9,000 (72 saris @ ₹ 125) + ₹ 900 (packing) + ₹ 900 (freight) = ₹ 1,00,800
Full 6-Month Projection Table
| Mth 0 | Mth 1 | Mth 2 | Mth 3 | Mth 4 | Mth 5 | Mth 6 | |
|---|---|---|---|---|---|---|---|
| Owner’s Equity | 20,000 | ||||||
| Bank Loan | 1,00,000 | ||||||
| Cash Sale Receipt | 15,000 | 17,000 | 20,000 | 25,000 | 32,000 | 40,000 | |
| Credit Sale Receipt | 3,000 | 4,000 | 5,000 | 5,000 | 6,000 | ||
| Total Inflow | 1,20,000 | 15,000 | 20,000 | 24,000 | 30,000 | 37,000 | 46,000 |
| Assets/Working Capital | 90,000 | ||||||
| Raw Material | 9,000 | 10,500 | 12,500 | 15,000 | 19,000 | 24,000 | 24,000 |
| Packing Material | 900 | 1,050 | 1,250 | 1,500 | 1,900 | 2,400 | 2,400 |
| Sales Commission | 1,800 | 2,100 | 2,500 | 3,000 | 3,800 | 4,800 | |
| Freight | 900 | 1,050 | 1,250 | 1,500 | 1,900 | 2,400 | 2,400 |
| Salary | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 | |
| Rent | 1,500 | 1,500 | 1,500 | 1,500 | 1,500 | 1,500 | |
| Utilities | 500 | 500 | 500 | 500 | 500 | 500 | |
| Interest | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | |
| Phone | 500 | 500 | 500 | 500 | 500 | 500 | |
| Office Exp | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | |
| Total Outflow | 1,00,800 | 21,900 | 24,600 | 28,000 | 33,300 | 40,100 | 41,100 |
| Surplus/(Deficit) | 19,200 | (6,900) | (4,600) | (4,000) | (3,300) | (3,100) | 4,900 |
| Closing Balance | 19,200 | 12,300 | 7,700 | 3,700 | 400 | (2,700) | 2,200 |
The projection is a planning tool
The Month 5 deficit is visible in advance — that is the whole point of projecting. Savitha can fix it before it happens: collect credit sales faster, ask the supplier for credit, postpone salary or rent, or take a short-term friend loan. A ₹ 2,700 hole seen three months early is a schedule; the same hole discovered on the day is an emergency.
Key Takeaways
Key Takeaways
- Cash flow projection = planned inflows minus outflows, month by month — a forecast, not a record.
- Credit sales appear as inflow only in the month the money arrives — never the month of the sale.
- Month 5 closes at − ₹ 2,700: the shop runs out of money despite growing sales — growth eats cash before it is collected.
- Commission is 10% of the month’s total sales (cash + credit), even though the credit money arrives later.
- The projection is a planning tool — deficits seen in advance can be fixed with faster collection, supplier credit, postponed salary/rent, or a short-term loan.
- So what? — A birthday-party planner booking events two months ahead hits the same trap: costs today, cash at the party.