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Growth meets the cash constraint
A driver-based one-year forecast.
Live experiment
Growth meets the cash constraint
Closing cash35
Before you move a sliderCan faster growth need new funding even when the forecast profit is positive?
Closing cash = 50 + CFO 65 − capex 80 = 35
Read the mechanism
Growth lifts earnings and, at the same time, ties up cash in receivables, inventory and capacity. Test the downside assumptions together; a sensitivity is not a forecast of what will happen.
Model assumptions and units
Made-up $000. Operating cash flow is revenue times the cash operating margin times 75%, minus the change in working capital, using an assumed 25% tax on that cash-profit proxy. No D&A, debt, distributions or minimum cash reserve. Negative closing cash is a funding gap, not a balance the business can hold.