Mastering Cash Flow Forecasting

• Tourism
• Foundation Degree

Cash Flow Forecasting 

and 

users of Financial Statements 

Learning Objective

Be able to describe the users of financial statements.

Understand the importance of cash flow forecasting and learn how to create a basic cash flow forecast.

Name one user of financial statements

External or Internal users?

Activity 

Choose two internal and two external users and take notes on why they would need financial information.

What is Cash Flow Forecasting?

Cash flow forecasting is the process of estimating the timing and amount of cash inflows and outflows over a specific period.

Importance of Cash Flow Forecasting

Cash flow forecasting helps businesses anticipate potential cash shortages or surpluses, allowing for better financial planning and decision-making.

Components of Cash Flow Forecast

A cash flow forecast typically includes projected sales, expenses, and timing of payments and receipts.

Creating a Cash Flow Forecast

Step 1: Start with opening cash balance. 

Step 2: Add cash inflows. 

Step 3: Subtract cash outflows. 

Step 4: Calculate closing cash balance.

Activity 1 

Students will discuss a cash flow forecast and solutions together as a group.

Activity 2

Construct a cash flow forecast individually - paper based.

Excel sheet / Formulae

Needed for the following:

Total receipts 

Total payments 

Net cash flow 

This afternoon 

Workshop:

Complete another cash budget - Jan 2015 practice paper