“Changing the World, One Small Business at a Time”

Luhring SurvivalWare, a global provider of small business financial software, announced today the launch of its 20,000 Small Businesses Initiative.   The initiative is directed at two groups:  (1) students, unemployed, and under-employed who have computer skills but no outlet to use them constructively and (2) entrepreneurs and small business owners who need help doing cash flow projections. 

The initiative consists of steep discounts on SurvivalWare Pro for students, the unemployed, and workers looking to upgrade their skills – along with online education and training to turn them into SurvivalWare Analysts and Developers.  The discounts amount to $500 off the regular $695 license fee for SurvivalWare Pro, a 72% savings.  

SurvivalWare Analysts help entrepreneurs do financial analysis and cash flow projections. It may involve a single company, or hundreds of locations that are part of a franchise network.  SurvivalWare Developers create applets to automate common tasks (e.g. data loading, printing graphs and reports).  They also develop customized Financial Models for larger customers or Industry-specific Financial Models for market niches. 

The company has set an ambitious goal to line up 20,000 participants by the end of 2013, and pair them with small business owners who need help.

To obtain a discount coupon and sign up for the next available training, visit the SurvivalWare website at

Financial Projections as a Secret Weapon?

Philip Campbell writes on his blog:

One of the secrets to creating credibility and trust with everyone who is financially invested in the success of your company is providing them financial projections.

Philip argues that doing full financial projections – including a full Income Statement, Balance Sheet, and Cash Flow Statements – puts you a notch above the competition when it comes to attracting investment or borrowing money.  I couldn’t agree more!

If you need some software to do the projections, we have a 30 day trial of our SurvivalWare Cash Flow Software ready for you to try out.

What is “Days of Cash?”

Days of cash is a measure of how much cash a company has in relation to its monthly operating expenses.  It helps answer the question, “How much cash do I need?”  It also allows you to track your company’s performance over time, or to compare companies of different sizes.

As with Cash itself – more is better when it comes to Days of Cash.  In my view, you can never have too much.

What are good and bad values for Days of Cash?

One interpretation of Days of Cash is that it is the number of days you can stay in business if you don’t make any more sales or collect any more money from customers.  Here are some ranges of values from bad to good:

Less than zero – this is bad.  It means you are holding back checks you have written to send after the cash arrives.  Your payables are understated on your balance sheet as a result.  This is a highly stressful time.

0 to 15 days – you are still in financial distress and having to spend too much time worrying about it and managing what gets paid when

15 to 45 days – you have some breathing room, but still need to keep an eagle eye on cash flow

45 days or more – this is good.  You have more important things to worry about.  However, things can change quickly, so you still need to track Days of Cash on a regular basis to make sure it stays in the good zone.

How to calculate Days of Cash

The simple definition is to take your ending cash balance and divide by daily cash operating expenses (Total Operating Expenses less Depreciation and Amortization). 

Cash is really cash and cash equivalents – stuff you can use to pay your bills.  So it includes your bank account and short term investments that can be converted to cash quickly.

Daily cash operating expenses are calculated differently depending on the time frame you are looking at.

There are four commonly used time periods when doing financial analysis:

1. Months

2. Quarters

3. Year to Date (1..12 months)

4. Years

The trick is to calculated Annualized Cash Operating Expenses for each of these time periods, and then divide by 365 to get a daily number.

For a single month:  Daily Cash Operating Expenses = (Monthly Cash Operating Expenses * 12 ) / 365

For a quarter:  Daily Cash Operating Expenses = (Quarterly Cash Operating Expenses * 4 ) / 365

For a year-to-date period: Daily Cash Operating Expenses = ((Year to Date Cash Operating Expenses / Number of Months) * 12 ) / 365

For a year: Daily Cash Operating Expenses =  Cash Operating Expenses  for the year / 365


Days of Cash = Ending Cash Balance / Daily Cash Operating Expenses

Example Days of Cash Calculation

from Company A’s financial statements: 

Annual Revenues:  $150,000

Total Operating Expenses for October: $10,000

Depreciation for October: $1,000

Cash as of October 31:  $3,000


Monthly Cash Operating Expenses for October = $10,000 – $1,000 = $9,000

Daily Cash Operating Expenses for October = $9,000 * 12 / 365 = $108,000 / 365 = $295.89

Days of Cash at the end of October = $3,000 / $295.89 = 10.1 Days