Cash-Flow Forecast
Projection of future cash movements over period (monthly, quarterly).
Formula
Net Cash Flow = Total Inflows − Total Outflows
Real World
A new bakery uses a 12-month cash-flow forecast to show a bank manager that, despite negative cash flow in the first three months, the business will become cash positive by month four.
Exam Focus
When asked to 'complete' a forecast, show your working for net cash flow and closing balance — method marks are available even if an earlier figure is wrong.
How well did you know this?