Cash Flow Forecasts
How can businesses calculate opening and closing cash balances in cash flow forecasts?
Businesses can calculate opening and closing cash balances in cash flow forecasts by considering the starting cash balance, adding or subtracting cash inflows and outflows during the period, and adjusting for any non-cash items.
What are the different components of a cash flow forecast?
A cash flow forecast typically includes components such as projected cash inflows (from sales, accounts receivable, investments, financing), projected cash outflows (for expenses, accounts payable, debt repayments, investments), net cash flow, opening and closing cash balances, and details of specific cash flow drivers such as inventory levels, receivables aging, and payment terms. It provides a comprehensive overview of the expected cash movements within a specific period.