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IBD short description: Money

The purpose of this menu is to define required external investments to your business for each time unit, and profitable use of your free money for internal needs and for investments to external business. Both these goals are achieved simultaneously during your cash balancing: negative cash is covered with attracted investments and positive cash is used for your own investments. In this process also your optimal policy is defined concerning your debts repayment and your money assets use. 

Here you can see the documents (forms) presented in IBD for money control. In these forms the white fields are intended for data input, the blue ones are calculated or selected by IBD. 

Available loans and external investments - allows describing money sources: name, annual interest, start month of possible money obtaining and repayment duration. IBD uses this data to calculate your debt flow for each used money source. Below we are talking sometimes about loans meaning in fact all available investment sources.

Loan raising and repayment schedule - is used to plan obtained investment values and their repayments complying with supposed loan conditions. You can select one of standard repayment policies proposed by IBD, if it is permitted in these conditions. In this case IBD calculates repayment values corresponding to selected policy. Otherwise, you can assign the loan portions and their repayments most appropriate for your cash balancing (see below).  After clicking the Calculate button or by opening the form, IBD calculates for each time unit the expected loan debt remaining after the planned repayments. 

Investments to another business.... - defines available options of free money use: bank accounts, stocks purchase, investment contracts, etc. The definition includes expected interest, start month and the period, while the investment and its return is considered.  

Investing... and return schedule - is used to plan the business use of your free money, returned incomes from them and accumulated assets. This schedule may plan also the use of liquid assets for internal needs - cash balancing and loans repayments. You can select here one of the standard return policies presented by IBD, if it complies with the investment conditions. In this case IBD calculates corresponding return values. Otherwise, you can assign the investment and return (draft) values most appropriate for your cash balancing.

Cash flow - shows total investments to your business, their repayments, use of free money for investments and their return, and the resulting cash values for each time unit. The example shown in this form (below) corresponds to the case, when you can plan all investments basing on cash balance (only small cash reserve is planned for unexpected payments), and your incomes from free money investing is less than annual interest of used loans.    

The following rules were used in this case for the money flow planning:

- Consider all planned time units sequentially from top to bottom.

- For each time unit cover cash deficit first with own liquid assets and then - with external investments.

- Use surplus cash first for loan repayments and then - for investments to external business.

- Recalculate debts, assets and cash for the current time unit and consider the next one.    

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