GLOBAL CASH FLOW MATRIX
Global cash flow (GCF) is the new gold standard for cash flow computations within the credit process. The concept has been around for a long time with renewed interest because of the the most recent credit crisis.
Two issues come to the forefront with respect to GCF - how to calculate it in a consistent manner, and how to interpret the results.
The Global Cash Flow Matrix addresses, and resolves both issues.
The Global Cash Flow Matrix is a Microsoft Excel template that blends the guarantor's personal cash flow with the stand alone business cash flows of entities the guarantor has an ownership interest in.
Features:
Shows you the process of computing GCF using the Global Cash Flow Matrix template.
Personal Tax Return Related Entity Identifier
Shows you how to use the guarantor's personal income tax return to identify candidate related entities. (This recent article may be of interest)
Related Entity Directory & Summary
- Shows all related entities and their respective cash flows blended with the guarantor's personal cash flow.
- You can exclude a related entity's cash flow from your GCF calculation by simply selecting it. This makes it easy to see how each related entity's apportioned cash flow affects the guarantor's GCF.
PCF (Personal Cash Flow) Section
- Use this screen to calculate the guarantor's stand alone personal cash flow using the personal tax return.
- You can calculate the most recent three years.
- Entries are referenced to lines on the personal tax return making it easy to use.
BCF (Business Cash Flow) Section
- Use these screens (up to ten related entities) to calculate the related entities stand alone cash flows, then 'blend' those cash flows with the guarantor's personal cash flow to create the global cash flow.
- You can 'special order' a template with as many related entity input screens as you want.
- Template handles both direct, and indirect ownership (tiered ownership, up to three levels removed).
The GCF Inclusion Checklist
The template contains a series of questions about the candidate related entity. These questions will help you determine if you should calculate the entity's stand alone cash flow for possible inclusion in the guarantor's GCF. As you make your selections, the GCF Inclusion Checklist will populate. When finished, use the color code on the right to determine if you should calculate the entity's stand alone cash flow, or skip it and move on.
Calculating the related entity's stand alone cash flow
You calculate the related entity's stand alone cash flow using either the business tax return (Regular 'C', or 'S' corporation (Forms 1120, 1120S), partnership (including multiple member limited liability company taxed as a partnership (Form 1065)), or the Cash Flow Statement.
You have the option of calculating (and using) two distinct, albeit related, cash flow techniques:
Operating Cash Flow Before (and After) Debt Service, or
All Inclusive approach which replicates a standard financial statement cash flow format.
'Blending' BCF with Guarantor's PCF
Once you've calculated the related entity's stand alone cash flow, you need to 'blend' it with the guarantor's personal cash flow. The Global Cash Flow Matrix gives you two approaches to accomplish this blending:
HIGH PRIORITY CAUTIOUS APPROACH - Use this approach when the related entity's stand alone cash flow is negative.
LOW PRIORITY OPTIMISTIC APPROACH - Use this approach when the related entity's stand alone cash flow is positive.
What kind of support do you offer?
Annual updates available - Tax forms change as do the line references used within the template. Each year you can purchase the current year's updated template for a discounted fee.
Webinar - Global Cash Flow Analysis (click to learn more)
This Webinar addresses global cash flow issues and shows you how to use the Global Cash Flow Matrix via case studies. And, it tells you how to interpret the results.
The Global Cash Flow Analysis Webinar is a 'stand alone' product. As a purchaser of the Global Cash Flow Matrix Template, you're entitled to a discount on the registration fee.
You will be notified via email when the Webinar is available.
How much does it cost and how do I purchase the template?
The cost is $125. LIMITED TIME OFFER - Usually $175
Simply fill in the required information below.
(Slideshow including screen shots)
User Comments:
"Thank you very much Michael!.....I've just had a cursory review of the template and I've honestly never come across a GCF spreadsheet as detailed and as well put together as this one here....Absolutely fantastic and I love the GCF map to boot! It is just amazing and I look forward to putting it to good use."
"I know you said it was powerful, but that's an understatement. Takes a lot of the guess work out of the process of computing the global cash flow."
"I really like the feature allowing me to select which related business cash flows I include (or exclude) from the guarantor's GCF. A reasoned, and consistent approach."
"Flipping between the 'optimistic' and 'cautious' approach to related entity cash flows is great - quite an eye opener."
"I was sold when you told me I could order the template with as many related entity input screens as I wanted. Paid for itself with just one client having thirty-eight related entities."