Cash flow forecasting is crucial for managing a company's finances effectively. By analyzing historical and future cash flow dynamics, businesses can make better budgeting decisions. This involves interpreting cash flow forecasts, distinguishing between profit and cash flow, and finding ways to conserve or generate cash in the short term. Different methods of project evaluation can also be used to assess a company's financial health. It's important to recognize the limitations of relying solely on accounting information when valuing companies.