BUSINESS RESEARCH / FREE TOOL

MSME owner earnings and cash headroom

Rebuild annual owner earnings, then test a separate dated cash decision. The default case reproduces Part 1; all amounts are editable.

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Fictional worked examples, prepared 25 September 2026. KES throughout. Replace inputs with your own dated records. Project 1 workbook: Article Case D6:D38; Owner Earnings D12:D22.

Annual earnings and maintenance

Annual earnings period:

Annual net income after tax and interest (KES):

Owner pay already expensed (KES/year):

Market replacement cost of owner labour (KES/year):

Other supported normalization, after tax (KES/year; signed):Positive adds back a genuinely non-recurring cost; negative removes a one-off gain. Do not repeat depreciation or owner pay.

Depreciation/amortisation already expensed (KES/year):

Other justified noncash adjustment (KES/year; signed):Do not add back a recurring economic cost simply because it is noncash.

Low maintenance-capital estimate (KES/year):

Base maintenance-capital estimate (KES/year):

High maintenance-capital estimate (KES/year):

Increase in required operating working capital (KES/year):A positive increase uses cash. Enter a release as negative and assess whether it can recur.

Scheduled principal (KES/year):

Separate growth investment (KES/year):

Reserve top-up (KES/year):

Dated cash and proposed withdrawal

Cash decision date:

Cash commitments through:

Stated cash available on decision date (KES):Reconcile to bank and mobile-money records. This is not annual owner earnings.

Additional confirmed collections by cash horizon (KES):

Uncollected/disputed amount wrongly included above (KES):

Payroll due by cash horizon (KES):

Critical suppliers due (KES):

Rent and utilities due (KES):

Tax due (KES):

Debt principal due (KES):

Prepaid order completion cost (KES):

Additional capex/committed uses due (KES):

Restricted cash within stated cash (KES):

Minimum cash reserve retained (KES):

Proposed owner withdrawal (KES):

Restore illustrative example

Editable fields use the amber background. Inputs are used for this response and are not saved to a member profile or lead list. CSV downloads contain the calculated tables for the submitted inputs.

Your scenario, step by step.

Annual owner earningsKES 990,000.00

Provisional cash headroomKES 140,000.00

Headroom excluding disputed cashKES -60,000.00

After proposed withdrawalKES -60,000.00

Annual earnings bridge

Item	KES / year
Net income after tax and interest	KES 1,800,000.00
Owner pay already expensed	KES 900,000.00
Replacement labour	KES -1,200,000.00
Supported normalization	KES 0.00
Normalized earnings	KES 1,500,000.00
D&A already expensed	KES 240,000.00
Other justified noncash adjustment	KES 0.00
Required working-capital increase	KES -370,000.00
Maintenance investment	KES -380,000.00
Estimated annual owner earnings	KES 990,000.00
Scheduled annual debt principal	KES 0.00
Separate annual growth investment	KES 0.00
Annual reserve top-up	KES 0.00
Annual residual planning proxy	KES 990,000.00

Cash decision: 2026-09-25 through 2026-10-02

Item	KES
Stated available cash	KES 1,200,000.00
Confirmed additional collections	KES 0.00
Listed near-term uses	KES -910,000.00
Restricted cash	KES 0.00
Reserve retained	KES -150,000.00
Provisional headroom	KES 140,000.00
Remove disputed/uncollected amount	KES -200,000.00
Reviewed headroom	KES -60,000.00
Proposed withdrawal	KES 0.00
Headroom after proposed withdrawal	KES -60,000.00

Maintenance sensitivity

Estimate	Maintenance / year	Owner earnings / year
Low maintenance	KES 300,000.00	KES 1,070,000.00
Base maintenance	KES 380,000.00	KES 990,000.00
High maintenance	KES 500,000.00	KES 870,000.00

Interpret the result.

The cash test is binding for the proposed draw when reviewed headroom is negative. Annual owner earnings do not fund a payment before cash arrives.

The dated test covers only the listed commitments. Use the weekly planner for intervening troughs. Neither result establishes a legally permissible dividend.

Formulae and symbol definitions.

\mathrm{OE} = N + D + A - M - \Delta W

OE = N + D + A − M − ΔW

OE is estimated annual owner earnings; N is annual normalized net income after replacing owner labour; D is depreciation/amortisation already expensed; A is other justified noncash adjustment; M is annual maintenance investment; ΔW is an increase in required operating working capital. All are KES/year. A release of working capital is negative.

H = C + R - U - X - B, \qquad H_{\mathrm{reviewed}} = H - Q

H = C + R − U − X − B; reviewed H = H − Q

H is dated headroom, C stated available cash, R additional confirmed collections, U listed due uses, X restricted cash, B the retained reserve and Q the disputed/uncollected amount counted in C or R. All are KES over the stated cash horizon. Subtract the proposed draw from reviewed H.

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