ABSTRACT
A cash forecast will highlight anticipated payments of loans, including interest payments, bonuses, major creditors, and dividends. A cash forecast will point out how much and in what period cash will be in excess, in other words, how much and when excess cash can be invested in short-term securities. A cash forecast is as vital to the operations of a business as are the typical financial statements issued by companies. Every company must provide the necessary cash for operating the business in both the short term and the long term. This cash is needed to ensure that the business will operate smoothly and that sufficient funds will be available to meet both current and future obligations. Irregularity in the flow of cash is inherent in any operating business and may require temporary borrowings. Lending institutions will require that a company prepare a cash forecast in support of any loan application.
