Activity 4

Facilitators Notes Distribute copies of the Farmer John Smith story to all participants (or write the information on the flip chart). Discuss the story. Make sure that the numbers and dates make sense to people. We will use the story to see how to fill in the boxes on the Projected Cash Flow Form. People will need to refer to the story as we proceed.	Program Content

Now help people to put the numbers in on the attached Projected Cash Flow. Have them use pencil and erase as needed. Make sure that people understand each item on the form. Distribute the calculators so that people can use them as they need to. * It may be necessary to make sure that people work together so that no one is left out- even if they aren’t real strong in reading and writing. This will depend on the group. You will need to know and be able to gauge how to handle whatever situations arise based on reading and writing skills levels. People may need to have their children or wives doing this session. You probably will have to walk through the information line by line and tell them where to put the information. See attached Form which is filled out. Distribute copies filled out before or after the participants get into the work as needed. (It might be needed early to "prime the pump" as it were to help people fill in the boxes. In that case discuss the numbers with the following types of questions: Why is that number in that box? What does it mean? )	HOW TO FILL OUT THE CASH FLOW FORM Fill in the Income boxes first but don’t add them up to get the Cash Inflow. Next fill in the expenses and put them in the right boxes. Add them up as the Cash Outflows. See the attached filled out Projected Cash Flow form. Now put a zero (0) in the box for Cash Balance Forward in January and start adding for the columns. (In a real case this Balance would be what cash is on hand on January 1 of the year for which the Projected Cash Flow is being done). Add the Cash Balance forward to the income figures to get the Total Cash Inflow. Subtract the Total Cash Outflow and any of the other items in the following lines according to the signs to arrive at the Cash Difference for that month. That figure is then carried up to the top of the next monthly column to start the process again. In our example, January would start with a zero in the Cash Balance Forward box and then have a negative $15.00 because there is no income but there are expenses. This is carried up to be the Cash Balance Forward for February where again there is no income but more expenses. This negative number is carried up to March when positive cash flow is planned to start kicking in.

Now ask: What do the numbers mean? What do they tell us about Farmer Smith’s Projected Cash Flow? (If no answers from the participants, use the text to the right.)	Look at expenses. They are up front in the year aren’t they? He either has to find the money to cover those expenses or borrow early in the season.

	Summary: The basic cash flow is established by following a sequence of putting in expected income, expected expenses and then completing the starting (Cash Balance Forward) and ending points (Cash Difference) in sequence from January through the year. From this starting point we can now look at some of the decisions which can be made about covering the gaps and paying back the loans. Those questions will be covered in the next Activity. Evaluation: Look over the forms that people are filling out to see how they are progressing. This is a formative evaluation step. It is key. Go back and help people get the basics or they will not be able to carry on.