Subtract monthly expenses from monthly income for net cash flow and annualize it.
Overview
Cash flow is the surplus (or deficit) after expenses. Positive cash flow funds savings; negative cash flow burns reserves.
Enter monthly income and monthly expenses. Net = income − expenses; annual = net × 12.
For rentals, include mortgage if you want levered cash flow; for personal budgets, include all fixed and variable bills.
Steps
Pay, rent collected, or other inflows.
All outflows for the same month.
Review net monthly and annual cash flow.
Lower expenses to see surplus improve.
Raise income to model a new job or rent bump.
Math
netCashFlow = monthlyIncome − monthlyExpenses; annual = netCashFlow × 12
Net monthly surplus annualizes by multiplying by twelve.
Worked cases
Net $2,300; annual $27,600
$2,300/mo surplus.
Net $200; annual $2,400
$200/mo surplus.
Net −$500; annual −$6,000
−$500/mo.
Why use this
Questions