Free course · Five rungs, one tool, one glossary
The Cash Flow Ladder
Cash flow from a lemonade stand to the research on default prediction. Each rung has a working model, and every result shows its formula with your numbers plugged in. A 13-week cash flow model and a full glossary sit at the end.
For educational purposes only. This material is general education about managing cash flow. It isn't legal, tax, accounting, lending, or investment advice, and reading it doesn't make you our client. Every business is different. Before you act on anything here, confirm it with your attorney, your CPA or tax advisor, your lender, and any other professional who advises your company. See the terms of use.
The rungs
Start where you are
Each rung stands on its own. An owner who already reads a cash flow statement can start at rung 3. A lender's analyst can start at rung 4.
- 1Cash vs. profitWhy a profitable company runs out of cashA lemonade stand you can run yourself shows how a company misses payroll while it is still profitable.
- 2Cash flow statementThe cash flow statement, and why net income isn't cashThe one financial statement that shows where the cash went, and how to rebuild it from net income.
- 3Working capitalWhere cash gets trapped, and how to free itHow receivables, inventory, and payables hold your cash, and what each day you win back is worth.
- 4Lender's viewThe ratios that forecast cash troubleThe ratios your banker runs on your numbers, and the trends that warn of trouble before the cash runs short.
- 5ResearchDistress prediction and the theory of corporate cashSixty years of research on predicting default, starting with the Altman Z-score you can run on your own balance sheet.
- Tool13-week forecastThe 13-week cash flow modelEvery dollar in and out, week by week, for the next quarter. Set your drivers and find your lowest point of liquidity.
- RefGlossaryCash flow definitions and formulasEvery term in the course with the formula behind it. Search it or filter by topic.
The best early warnings measure the gap between reported earnings and collected cash.
Free Excel template
Run it on your own numbers
The Excel version of the 13-week model, built with live formulas: a drivers tab, the weekly forecast, the figures a lender reads first, and a forecast-versus-actual tracker for the weekly roll-forward.
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The Cash and Levers Diagnostic builds your 13-week forecast from your own ledger in the first month, then hands it to your team to run.