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.
Workbook structure
The student workbook intentionally leaves the analysis structure open. Build the schedules required above, retain the source inputs, and add formula-based checks. You may add worksheets. The worked solution is one acceptable structure, not the only correct layout.
03 / Review your work
Try the assignment before opening the answer.
Open the worked answer and notes
Base weekly cash schedule - USD thousands
| Week | Opening | Receipts | Payments | Closing |
|---|---|---|---|---|
| 1 | 50.00 | 20.00 | 30.00 | 40.00 |
| 2 | 40.00 | 25.00 | 35.00 | 30.00 |
| 3 | 30.00 | 30.00 | 35.00 | 25.00 |
| 4 | 25.00 | 20.00 | 40.00 | 5.00 |
| 5 | 5.00 | 40.00 | 30.00 | 15.00 |
| 6 | 15.00 | 35.00 | 35.00 | 15.00 |
| 7 | 15.00 | 25.00 | 40.00 | 0.00 |
| 8 | 0.00 | 45.00 | 30.00 | 15.00 |
| 9 | 15.00 | 30.00 | 35.00 | 10.00 |
| 10 | 10.00 | 40.00 | 40.00 | 10.00 |
| 11 | 10.00 | 35.00 | 35.00 | 10.00 |
| 12 | 10.00 | 45.00 | 30.00 | 25.00 |
| 13 | 25.00 | 50.00 | 40.00 | 35.00 |
Receipt-delay test - USD thousands
| Week | Opening | Receipts | Payments | Closing |
|---|---|---|---|---|
| 1 | 50.00 | 20.00 | 30.00 | 40.00 |
| 2 | 40.00 | 25.00 | 35.00 | 30.00 |
| 3 | 30.00 | 30.00 | 35.00 | 25.00 |
| 4 | 25.00 | 20.00 | 40.00 | 5.00 |
| 5 | 5.00 | 30.00 | 30.00 | 5.00 |
| 6 | 5.00 | 45.00 | 35.00 | 15.00 |
| 7 | 15.00 | 25.00 | 40.00 | 0.00 |
| 8 | 0.00 | 45.00 | 30.00 | 15.00 |
| 9 | 15.00 | 30.00 | 35.00 | 10.00 |
| 10 | 10.00 | 40.00 | 40.00 | 10.00 |
| 11 | 10.00 | 35.00 | 35.00 | 10.00 |
| 12 | 10.00 | 45.00 | 30.00 | 25.00 |
| 13 | 25.00 | 50.00 | 40.00 | 35.00 |
The first buffer breach is week 4, before the minimum cash balance in week 7. Shift 10 from week 5 to week 6 using the separate editable delay assumption. Total receipts and final cash remain unchanged; week 5 cash falls to 5. Confirm collections with AR and obtain Treasury approval for committed liquidity before week 4.
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. The total duration of 75-90 minutes is a planning estimate, not a tested completion time. Allocate class time according to prior knowledge and reserve time for discussion of the decision and evidence.
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.
Decision
Act before week 4: ask AR to validate receipt dates and Treasury to obtain approval for adequate committed liquidity.
Evidence and reasoning
The first buffer breach occurs before the lowest cash week. The ending cash balance cannot demonstrate that all earlier payments were fundable. Delaying a receipt changes timing even when total receipts are unchanged.
What would change the conclusion
Signed funding, confirmed collections or approved payment changes may close the gap. Run each change through the weekly schedule; do not count unsigned finance as cash.
Related learning
Version 1.1. Synthetic teaching case. Completion time is an estimate.