What is Cash Flow Point?
A cash flow point refers to a specific moment when a business’s cash inflows equal its cash outflows, marking the point of balance between income and expenses. It helps assess liquidity, operational efficiency, and financial health by indicating whether a business generates enough cash to sustain operations and cover short-term obligations.
Cash Flow Calculator
Use this calculator to effortlessly measure your business cash flow and gain a clear view of your available funds.
What is my current cash flow?
Available Cash
Cash Flow Summary Report
Cash at beginning: $0.00
Total Operations: $0.00
Total Investments: $0.00
Total Financing: $0.00
Cash at end: $0.00
Definitions
Cash at beginning of period: Total cash available at the start of the period.
Cash at end of period: Remaining cash after all inflows and outflows.
Why Use It?
Cash flow statements help track the actual movement of money within a business, covering inflows from operations and outflows for expenses or investments. They reveal liquidity, highlight potential cash shortages, and help in better decision-making. Understanding cash flow ensures smoother operations, timely payments, and stronger control over financial health and business sustainability.
How to Calculate Cash Flow Point?
- Identify all fixed costs such as rent, salaries, and insurance.
- Deduct any non-cash expenses from fixed costs like depreciation, or amortization.
- Determine variable costs per unit, including (materials + packaging + direct labour)
- Set the selling price per unit
- Calculate the contribution margin per unit (Selling Price − Variable Cost)
- Find the cash flow point in units by (Fixed Costs ÷ Contribution Margin)
- Multiply the break-even units by the selling price to get the total revenue at the cash flow point.
Cash Flow Point Formula:
Cash Flow Break-Even Point (units)= Fixed cost ÷ (Revenue per Unit−Variable Cost per Unit)
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