The Use Of Cashflows Forecasts

Question 1

Planning

Answer 1

Cash flow forecast used for planning
Can be used to plan to use extra cash available
Or used to stop negative cash flow

Question 2

Monitoring

Answer 2

Cash flow forecasts have to be monitored closely in line with the actual cash flow

Question 3

Control

Answer 3

Areas of concern occur the business can try to control this by attempting to increase inflow or decrease outflows

Allows control of cash issues

Question 4

Target setting

Answer 4

Cash flow forecast can help business set targets