inventories—continue to exist for the life of the business. Therefore, funds obtained from
investments in the business or from loans must continue for its life unless they arc paid off.
Because cash does not produce revenue, it should not sit idle but should be used to
earn income. The amount of cash a business needs, and has, will vary during the year, since
most businesses have busy and slack periods. To keep the investment and borrowing low.
cash flow projections must be made. The worksheet in Chapter 1 5 (Figure ก 5. 1) is a
that can be used to make such projections, which can then be compared with what. actually
happens. You might contact your nearest SIM office to gel information to help you estimate your startup costs. Also, various financial firms and certified public accountants have
computed some helpful standard figures.