Cash-Flow Forecast: Uses & Limits

What is a cash‑flow forecast used to identify?

Cash shortfalls

How does a cash‑flow forecast help with overdrafts?

Arrange overdrafts before liquidity issues

Why is a cash‑flow forecast important for business plans?

It supports securing external finance

What is a key limitation of cash‑flow forecasts?

They are based on estimates

How can inflation affect a cash‑flow forecast?

It can make forecasts inaccurate

What is the opportunity cost of time spent on cash‑flow forecasting?

Time could be used for operational activities

What does a cash‑flow forecast help a business arrange?

Overdrafts

What external parties rely on cash‑flow forecasts?

Investors and banks

Why might a cash‑flow forecast become outdated?

Due to dynamic market factors

What are the two main uses of a cash‑flow forecast?

Identify cash shortfalls and support finance