Description
What sort of difficulty can you imagine the manager of an organization would be in, if the organization did not routinely prepare cash flow forecasts and working capital analyses?
Instructions:
Your response must be in your own words. Your initial post should be 750 word minimum
Explanation & Answer
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Running head: RESPONSE
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RESPONSE
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Cash Flow Forecasts
There are many parameters through which the fiscal health of an organization may be
measured. One of the ways is to carry out an analysis of the organization’s cash flow.
Conversely, the term cash flow, as used in accounting, refers to the inward and outward
movement of money within an organization, as to afford liquidity. On the other side, the cash
flow forecast refers to the forecast, which denotes how variations in balance sheet affect cash and
cash equivalent. Cash flow forecast plays a significant part in an organization. Firstly, the tool is
essential in making sure that the cash inflows and cash outflows leave the organization in a
desirable liquidity status (Pae & Yoon, 2012). As an organization goes about its operating,
investing, and financing operations, the level of cash it holds will always keep changing. For
effective operations to be realized, it is necessary for a business to have a desired level of cash at
its disposal so that it can meet ot...
