Cash Flow

• A Forecast is a prediction of what may happen in the future
• A cash Flow Forecast is therefore a prediction of the inflows and outflows of cash in the future
• Businesses use past figures and experiences to predict forecasts
• A Cash Flow statement differs from a forecast. It detailed what has happened in the business, i.e. the money that has flowed in and out of the business

Cash flow versus Profit

• Cash flow is most important in the short term as it is the businesses ability to pay their bills
• Profit is more important in the long term
• Businesses can be profitable and still experience cash flow problems

Creating a cash flow forecast

In order to…