Ads end in 20 seconds
This content is free thanks to our sponsors
Sponsored Ad – I may earn a commission if you click and buy
Finance
Cash Flow Forecast
A prediction of how much cash will flow in and out of a business over the coming months.
Cash flow forecasts are more important than profit forecasts for small and growing businesses. Many profitable companies have gone bankrupt because they ran out of cash. Good forecasts help managers make better decisions about spending and borrowing.
It's looking into a crystal ball to see whether your bank account will be full or empty next quarter.
Real world: A seasonal business uses a cash flow forecast to see that it will be short of cash in January and February even though it is profitable on paper. It arranges a short-term loan in advance.
💡 Cash flow is reality — profit is just an opinion until the cash actually arrives.