NO EARNING ASSETS? 4

The Personal Cash Flow Statement of an individual or a household with no financial or physical Earning Assets (whose only assets are Manhours) will look as follows:

Inflows will come from Salaries &/or Professional Fees. If he takes out a Loan to cover Direct Costs & Expenses that cannot be covered by Salaries or Professional Fees, the loan proceeds will form part of Inflows for the period.

Outflows will consist mainly in Direct Costs (i.e., what was spent in earning the Revenues) and personal Expenses.

Total of Inflows minus total of Outflows will be the Net Inflow. Added to Cash at the beginning of the period (deducted, if the Net Inflow is negative –i.e., more Outflows than Inflows) will result in Ending Cash.

Ending Cash, if positive, adds to the Savings Account.

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