Seasonal Cash Flow Smoothing & Weighted Averages
Tithes dropped 22% this week. Ruth must decide if it's a trend or noise — and how big the reserve should be.
- 52 weeks of giving history
- 3-period weighted moving avg
- Standard deviation
- Operating budget
- 1
Compute the WMA
Weights 3/2/1: (3×W₁ + 2×W₂ + 1×W₃) / 6 = smoothed expectation.
- 2
Compare actual to WMA
If this week is within 1σ, it's noise. Outside 2σ = investigate.
- 3
Set reserve target
Reserve ≥ 3 months expenses + 2σ of weekly giving variability.
- 4
Report to elders
Show smoothed trendline, not raw week-over-week. Prevents panic decisions.
Giving is never linear: summer dips, post-holiday lulls, and a December spike that can deliver up to 30% of annual income. A flat arithmetic mean will under-estimate your operating reserve and leave staff payroll exposed in July. Slide each month's giving and watch the 12-month Weighted Moving Average, the 4-week rolling standard deviation, and the required cash-reserve buffer recalculate in real time.
Tap Show next step to reveal the math one piece at a time.
Weighted moving average vs simple mean
Given: Months [10, 11, 9, 14] · weights [1, 2, 3, 4]
- 1
Multiply each month by its weight
10·1 + 11·2 + 9·3 + 14·4 = 115
Sizing the operating cash reserve
Given: Monthly expenses = $25k · σ of giving = $6k
- 1
3 months base
3 × 25,000 = $75,000