How Do I Create a Cash Flow Projection?

Cash flow forecast is a forecast of the outflow and inflow of corporate funds in the coming months or quarters. Its purpose is to rationally plan the company's cash income and expenditure, coordinate the relationship between cash income and expenditure and operations, investment, and financing activities, maintain cash balance and balance of debt, and provide a basis for cash control.

Cash flow forecast

Cash flow forecasting is the basis for effective cash management, including income forecasting and expenditure forecasting.

The revenue forecast targets various government revenues such as various taxes and other charges.

Expenditure forecast is mainly aimed at various expenditures such as the budget unit's plan for the use of funds and the repayment of principal and interest on government bonds.

In order to accurately predict the treasury cash flow, countries have established basic treasury cash income and expenditure databases, selected scientific and effective forecasting methods, and carried out rolling forecasting of the treasury cash flow in a certain period of time to continuously reduce forecast errors and create conditions for the implementation of treasury cash management.

The methods of cash flow forecasting are mainly

When conducting predictive analysis of enterprises, assessors should focus on understanding the following issues:

1.How strong is the company's internal cash flow generation capacity?

2. Is the company capable of fulfilling its short-term financial obligations through operating cash flows?

3. Can the company continue to fulfill its short-term financial responsibilities without reducing its operational flexibility?

4. How much cash is invested in the growth of the company? Is it using internal cash flow or relying on external financing?

5. What kind of external financing does a company rely on? Equity, short-term borrowing, or long-term borrowing? Is this financing method suitable for the company's overall operating risk?

6. Cash flow (FFO) before working capital investment and interest payment, to check whether the company can generate operating cash surplus; operating cash flow after working capital investment, assess how the company manages working capital; cash flow before interest payment, assessment The ability of a company to repay interest;

7. Cash flow before dividends are paid, assessing the financial flexibility of the company to finance long-term investments;

8. Cash flow after external financing to test the financial policies of the company.