| Cash flow forecasting insures the ability to manage and control cash on a week-to-week
basis. Tracking cash flow holds the clues to a company’s earning potential, risk and
liquidity. Cash flow forecasts help management determine:
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Type and extent of financing required to expand and bolster operations |
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Reliability and relative importance of current and future cash sources |
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Available funds for growth and maintaining competitive position |
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Overall financial health |
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Changes in the relationships among each flow element, i.e. identifying abnormal or cyclical factors |
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Earnings forecasts |
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Ability to pay obligations |
