cash flow analysis - single contractor

In this example the cash flow for a project with a single contractor and 10 percent retainage will be calculated. Begin by drawing a precedence diagram of the early start schedule.

Next cost load the activities. Sum the costs for all activities in each payment period. For those activities split between multiple payment periods allocate the proportional cost of the activites based on an average dollar per day cost allocation.

Since we are trying to evaluation the timing of actual cost, indirects, earnings, and profits the actual cost expected is added to the schedule not the earned value. You will see, in this example, how earned value is calculated.

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Since overdraft, interest payment, and break even point may be different under different scenarios owner’s payment schedules and retainage, the student should copy the above information into a spreadsheet and run the numbers considering an owner who pays 60 days following receipt of invoice with a 15% retainage.

What impact might incorrect intial project planning have on cash flow and analysis of your project's break-even point?

How might the use of subcontractors effect profit?

Can the financial impact of of project delays be impacted by cash flow analysis? If so, explain.