Cash Flow Projection
Forecast of incoming and outgoing funds to manage liquidity.
Detailed Description
Cash Flow Projection
What is the main purpose of cash flow projection?
The main purpose of cash flow projection is to estimate future cash inflows and outflows, helping businesses predict their liquidity position.
How do cash inflows differ from cash outflows?
Cash inflows are the money entering the business, while cash outflows are the expenses leaving the business.
What is net cash flow?
Net cash flow is calculated by subtracting total cash outflows from total cash inflows, indicating whether there is a surplus or shortfall.
Why is it important to regularly update cash flow projections?
Regular updates ensure projections reflect actual performance and changing business conditions, improving their accuracy.
What tools can assist in creating cash flow projections?
Tools like spreadsheets, accounting software, and dedicated financial planning tools can assist in creating cash flow projections.