01 / Learn the method
Learning outcomes
Find the cash trough before deciding which actions matter. Calculate the result, reconcile it and communicate its limitations.
Method
A direct cash forecast places receipts and payments in the week cash moves, not when revenue or expense is recognized. Opening cash plus receipts less payments equals closing cash; next week opens at that closing amount. Track the minimum balance, because a healthy final week can hide an earlier shortage.
Smaller worked example
Opening cash 10, receipts 5 and payments 12 gives closing cash 3. If the minimum buffer is 4, there is a 1-unit buffer shortfall even though cash remains positive.
02 / Put it to work
Business context and rules
Fictional Delta Services. Weeks 1-13 start 5 October 2026, each covering Monday-Sunday. USD thousands. Opening cash 50; minimum buffer 20. Inputs provide all expected customer receipts and committed operating payments, including payroll, tax and supplier payments; no financing, interest, FX or other flows. No capex is assumed. These are cash timing inputs, not accounting revenue / expense. Do not invent borrowing or move contractual payments without documenting a scenario. Receipts may be delayed; a forecast is not a bank guarantee.
Original synthetic inputs
| Input | Value | Unit |
|---|---|---|
| Opening cash | 50 | USD thousands |
| Minimum cash buffer | 20 | USD thousands |
| Week 1 customer cash receipts | 20 | USD thousands |
| Week 1 committed operating payments | 30 | USD thousands |
| Week 2 customer cash receipts | 25 | USD thousands |
| Week 2 committed operating payments | 35 | USD thousands |
| Week 3 customer cash receipts | 30 | USD thousands |
| Week 3 committed operating payments | 35 | USD thousands |
| Week 4 customer cash receipts | 20 | USD thousands |
| Week 4 committed operating payments | 40 | USD thousands |
| Week 5 customer cash receipts | 40 | USD thousands |
| Week 5 committed operating payments | 30 | USD thousands |
| Week 6 customer cash receipts | 35 | USD thousands |
| Week 6 committed operating payments | 35 | USD thousands |
| Week 7 customer cash receipts | 25 | USD thousands |
| Week 7 committed operating payments | 40 | USD thousands |
| Week 8 customer cash receipts | 45 | USD thousands |
| Week 8 committed operating payments | 30 | USD thousands |
| Week 9 customer cash receipts | 30 | USD thousands |
| Week 9 committed operating payments | 35 | USD thousands |
| Week 10 customer cash receipts | 40 | USD thousands |
| Week 10 committed operating payments | 40 | USD thousands |
| Week 11 customer cash receipts | 35 | USD thousands |
| Week 11 committed operating payments | 35 | USD thousands |
| Week 12 customer cash receipts | 45 | USD thousands |
| Week 12 committed operating payments | 30 | USD thousands |
| Week 13 customer cash receipts | 50 | USD thousands |
| Week 13 committed operating payments | 40 | USD thousands |
Required deliverables
Prepare all 13 weeks with opening cash, receipts, payments and closing cash; identify the first buffer breach and minimum. Propose two concrete actions with owner, timing and approval required. Test shifting 10 of week 5 receipts to week 6, preserving total receipts.
Use formulas for derived amounts and preserve source data. Put narrative deliverables in the workbook response area; expand it as needed. Compare amounts within 0.01 of the stated unit and percentages within 0.1 percentage point. No unsupported balancing plugs.
03 / Review your work
Try the assignment before opening the answer.
Open the worked answer and teaching notes
Worked numerical schedule
| Measure | Value | Unit |
|---|---|---|
| Week 1 closing cash | 40.00 | USD thousands |
| Week 2 closing cash | 30.00 | USD thousands |
| Week 3 closing cash | 25.00 | USD thousands |
| Week 4 closing cash | 5.00 | USD thousands |
| Week 5 closing cash | 15.00 | USD thousands |
| Week 6 closing cash | 15.00 | USD thousands |
| Week 7 closing cash | 0.00 | USD thousands |
| Week 8 closing cash | 15.00 | USD thousands |
| Week 9 closing cash | 10.00 | USD thousands |
| Week 10 closing cash | 10.00 | USD thousands |
| Week 11 closing cash | 10.00 | USD thousands |
| Week 12 closing cash | 25.00 | USD thousands |
| Week 13 closing cash | 35.00 | USD thousands |
| Minimum weekly closing cash | 0.00 | USD thousands |
| Minimum buffer headroom | -20.00 | USD thousands |
| 13-week receipts | 440.00 | USD thousands |
| 13-week payments | 455.00 | USD thousands |
| Cash roll-forward residual | 0.00 | USD thousands |
Interpretation and recommended actions
The base minimum closing cash is 0 in week 7, so the minimum buffer shortfall is 20. Cash ends at 35 in week 13. The first buffer breach is week 4, which closes at 5; week 3 closes at 25. Shifting 10 of week 5 receipts to week 6 makes week 5 cash 5 instead of 15, with no change to final cash. Confirm customer timing with AR before week 4 and discuss a committed funding buffer with Treasury. Do not describe unsigned financing as available cash.
Scoring rubric - 100 points
| Dimension | Points | Awarding guidance |
|---|---|---|
| Calculation | 40 | Thirteen-week roll-forward 20; trough and breach 10; timing scenario 10. |
| Interpretation | 25 | Correct application of the case rules 10; explain the business decision 10; identify evidence or limitations 5. |
| Controls / audit trail | 20 | Traceable formulas 8; independent reconciliation 8; explicit units and signs 4. |
| Communication | 15 | Decision and numerical headline 5; actions with owners and evidence 5; concise response covering all required deliverables 5. |
Award method credit after an isolated arithmetic error rather than repeatedly deducting for it. Equivalent account labels and well-supported alternative recommendations are acceptable. Numerical tolerance is 0.01 in the stated units; no universal passing score is prescribed.
Common mistakes
Looking only at week 13; using profit as receipts; shifting a receipt without moving it into another week; assuming funding is already approved.
Staged hints
Carry each closing cash balance into the next week. Separate a buffer breach from a negative balance. Total receipts must be unchanged in the timing test.
Instructor notes
Prerequisites: Cash-flow basics. Suggested use of the estimated 75-90 minutes: spend roughly 15% on the lesson and smaller example, 55% on the independent task, 20% on comparing approaches and 10% on the decision discussion. Timing is untested. Ask learners to explain why the numerical check is necessary but not sufficient.
For a simpler class, provide the model structure and work through one driver. For an extension, change one operational assumption and require a new reconciliation and recommendation. Verify the new key before distributing any variant. Open files in the intended spreadsheet application before class. Solutions are learning resources, not secure hiring examinations. Expert review remains pending.
Continue this learning path
CFT-01 · Turn Receivables into a Cash Collection Plan
CFT-03 · Stress-Test Liquidity Before the Shortfall
AI-assisted synthetic teaching case. Expert review and native Excel / Sheets testing pending.