Cash flow analysis

Welcome once again to my blog! This topic is less helpful for students working on personal projects because the cost of most small open source projects are usually zero! So if you’re a student make sure to come back for next weeks blog to learn more project development tools/tips! As you can see the topic is once again a very important one (and super not boring) for agile project managers. 

         If you’ve read my previous blogs or watched my vlogs you would know that one of the most important parts of project development is the planning and the same is true when it comes to money! Estimating costs and return on cost helps decide if a project is even worth it in the first place. Say for example that you decided to buy a car for super cheap with the intent of fixing it up and selling it. The car in this situation would be a project that your company or you as the project manager decided to start. after you get home and work on the car for a few months you manage to get the car running and it’s not in bad shape! It runs , the air conditioner works and you’re proud of the work you did so you decide to list the car for sale like you planned. After looking at cars like yours for sale you realize that the amount of money you spent on repairs means that you only made a few hundred dollars on the sale and you don't feel like the effort was worth the profit! This sort of thing can be prevented by estimating the costs and the return on investment with cost flow analysis.

         Cost flow analysis isn’t a diagram specifically or  a set of sheets that need to be filled out. Instead the best way to describe it would be an idea of estimating costs (very simple i know). When it comes to estimating costs there are a few different kinds of costs, the first is very easy and it’s called tangible costs. In the car example previously the tangible costs would be things that can be easily measured like how much the car parts cost or if you had someone else work on the car it would be how much you paid them! Intangible costs on the other hand are things that aren’t so easy to measure. Like while you were working on the car you would get frustrated and had a slightly worse day because of it. Direct costs would be kind of under tangible costs where it would be the cost of paying someone to work on the car, while indirect costs would be the amount that you spent on the tools to work on the car yourself, while not directly part of the cost of the car it was still a cost while making the car.