--- title: Cash and Cash Equivalents description: Accurate cash flow forecasting is essential for managing a business's finances. PlanGuru simplifies this process by automatically handling cash flow without requiring manual projections --- [Skip to content](https://help.planguru.com/knowledge/planguru-app-online/cash-and-cash-equivalents#main-content) [![PlanGuru Help Center](https://help.planguru.com/hs-fs/hubfs/logo_PlanGuru_helpcenter.png?width=360&height=50&name=logo_PlanGuru_helpcenter.png)](https://help.planguru.com/knowledge?hsLang=en) - [Your Tickets](https://help.planguru.com/tickets-view) - [Sign out](https://help.planguru.com/_hcms/mem/logout) Open main navigation Close main navigation - [Your Tickets](https://help.planguru.com/tickets-view) - [Sign out](https://help.planguru.com/_hcms/mem/logout) - [Submit a Ticket](https://help.planguru.com/tickets-view/new) [Submit a Ticket](https://help.planguru.com/tickets-view/new?hsLang=en) Hello. What do you need help with? - There are no suggestions because the search field is empty. 1. [Help Center](https://help.planguru.com/knowledge?hsLang=en) 2. [PlanGuru App (Online)](https://help.planguru.com/knowledge/planguru-app-online?hsLang=en) 3. [Forecasting & Modeling](https://help.planguru.com/knowledge/planguru-app-online?hsLang=en#forecasting-modeling) # Cash and Cash Equivalents ## Accurate cash flow forecasting is essential for managing a business's finances. PlanGuru simplifies this process by automatically handling cash flow without requiring manual projections     #### 💰 Cash & Cash Equivalents In PlanGuru, the **Cash & Cash Equivalents** line represents the core of your company’s liquidity — automatically calculated and continuously updated as your financial model evolves. --- ### 1️⃣ Overview When you open a **new (blank) scenario**, the **Cash** line is automatically pre-created on the **Balance Sheet**. This account behaves differently from others because PlanGuru **automatically manages** all changes to it based on: - Balance Sheet activity (asset and liability changes) - Income Statement results (revenues, expenses, and net income effects) You can **rename** the Cash line’s description but **cannot modify its projection method** — it is fully automated. --- ### 2️⃣ Automatic Cash Adjustments PlanGuru continuously adjusts cash as you make changes across your model. | Example | Impact on Cash | Description | | --- | --- | --- | | Add a Fixed Asset | 🔻 Cash Decreases | Cash is reduced when purchasing assets unless financed | | Finance an Asset with a Loan | 🔸 No Cash Change | The loan offsets the cash outflow, keeping cash stable | | Increase Accounts Payable | 🔺 Cash Increases | Deferring payment increases available cash | | Reduce Accounts Receivable | 🔺 Cash Increases | Collecting customer payments increases cash | These relationships ensure your **Balance Sheet stays in balance** and your **Cash Flow Statement** accurately reflects inflows and outflows. --- ### 3️⃣ Income Statement Impacts PlanGuru also automatically adjusts cash based on the **Income Statement**: - **Revenue Increases Cash** → when sales are collected immediately. - **Sales on Account** → cash adjusts based on receivable collection terms. - **Expenses Reduce Cash** → unless they are accrued or deferred. - **Net Income Impacts Cash** → after accounting for all non-cash and timing adjustments. 📸 *\[Insert Screenshot: Example – Cash impact of revenue and receivable timing\]* --- ### 4️⃣ Cash Flow Integration PlanGuru automatically generates a **Cash Flow Statement** based on all activity in the **Income Statement** and **Balance Sheet**. This provides a complete view of your company’s liquidity: - **Operating Activities**: Changes in working capital, accruals, and income items. - **Investing Activities**: Fixed asset purchases and disposals. - **Financing Activities**: Loans, equity injections, and repayments. 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