How do I deal with the cash flow in the restaurant

Cash flow

How liquid is your company?

With the Cash flow statement disclose how the business transactions affect cash and cash equivalents. It is also referred to as a cash flow statement in the business plan.

The cash flow calculation represents the connection between the profit and loss result and the financial result. It is therefore a great gain in knowledge when it comes to the financial strength and profitability of your company.

Calculate cash flow

The cash flow calculation is an integral part of a business plan. For the calculation you must first determine which expenses are cash and which are not.

An investment in the first financial year can be written off over the following years. The investment sum is cash effective in the first year (you have bought and paid something) and not in the following years (the acquisition affects your annual result without you having to make a payment).

Now that you have determined whether each item is cash effective, you can start calculating the cash flow. The calculation formula is standardized and can be viewed here, for example. If you are having trouble calculating cash flow, it is imperative that you seek advice from a professional. As with all other calculations in your business plan, there must not be any logic or calculation errors here!

Indirect vs. direct method of cash flow calculation

The two methods of cash flow calculation assume different numbers.

Direct cash flow calculation: Here the individual items are used as payment quantities for the calculation.

Indirect cash flow calculation: Here the cash flow is derived from the income statement.

Tip for the cash flow calculation: In your business plan you should include the direct method choose. Because it is easier for the reader to understand. Make sure, however, that both methods of calculation come to the same result.

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