Armed with the figures from the cash-driver shaping sheet (CDSS), we can project future cash flows. We begin by applying the CDSS assumptions for the year 2001 to NTTC’s income statement for 2000 (page 174), along with 2000’s ending balance sheet (page 176). In the discussion in Chapter 4, we explained that we needed a starting and ending balance sheet, along with the intervening period’s
income statement to fill in the cash-flow worksheet. Now that we are doing a projected cash-flow statement, the projection itself will serve as the income statement as we create it. We will also be forecasting the needed elements of the ending balance sheet as we go. With those pieces, we can construct a projected cash-flow statement for 2001 in the UCA cash-adjusted income-statement format, then use the 2001 figures and assumptions for 2002, and so on. This future cash-flow projection for the NTTC roll-up is found on page 178.

Let’s first consider a few examples of how we go from the last year of historical data to a first year of cash-flow projection by applying forecasted CDSS driver assumptions. We begin with year 2000 actual sales of $38,188,000 from the income statement and apply the sales-growth forecast of 9.9%
from the CDSS to get forecasted 2001 sales of $41,968,612 (2000 sales x 1.099).

Next on the cash-flow projection, we need to adjust that projected 2001 sales figure for the change in accounts receivable in order to find projected cash from sales. The year-end 2000 balance sheet shows accounts receivable of $3,243,364, which we know (from the CDSS) represented 31 days worth of 2000 sales. But we are forecasting a drop to 30 days of accounts receivable at the end of 2001 and so:
30 ÷ 365 x $41,968,612 (2001’s projected sales) =
$3,449,475 (projected year-end 2001 accounts receivable)

Taken From : Cash Rules