Ch.13 Cash Forecasting

Question 1

Purpose

Answer 1

Predictive Forecasts - predict and project what will happen in the future. Analytical Forecast - answer what if questions or to predict the financial impact of a given project

Question 2

Purpose

Answer 2

Predictive Forecasts - predict and project what will happen in the future. Analytical Forecast - answer what if questions or to predict the financial impact of a given project

Question 3

Purpose of forecast

Answer 3

Managing Liquidity Controlling financial activities Meeting Strategic Objectives Budgeting Capital Managing Costs Managing Currency Exposure Complying with regulatory requirements.

Question 4

Forecasting Horizon

Answer 4

ST Forecasting - 1-30 days in lenght Medium Term Forecast - 1-12 months in length Long Term Forecasting - > One year

Question 5

Update Frequency

Answer 5

Static Forecasts - Updated monthly, but doesn’t change over time Rolling Forecasts - Updates with new forecasted numbers monthly