Stay Ahead of the Game: Forecast Cash to Avoid Financial Pitfalls
The article discusses the importance of forecasting cash for companies to plan and control their cash flows effectively. By projecting profit statements and balance sheets, companies can compare actual results with planned ones to achieve their targets. A cash budget helps project future cash flows, while a funds flow statement looks back at past cash spending. Planning cash well in advance can help avoid costly capital expenses and identify cash shortages early on.