Forecasting and Managing Cash Flows

This is an extensive educational study PowePoint designed for Business students, focusing on cash flow management. The document is structured into 7 comprehensive chapters covering all aspects of cash flow in business.

Main Contents
Chapter 1: The Importance of Cash to a Business
Cash as a liquid asset and the liquidity hierarchy
Business survival vs. profit concepts
The cash flow cycle (working capital cycle) with detailed timelines
Working capital requirements across different business types
Day-to-day operational cash needs
Chapter 2: The Difference Between Cash Flow and Profit
Fundamental definitions and timing differences
Detailed comparison between profit and cash flow
Real-world scenarios where profitable businesses fail due to cash issues
Visual representations and case studies
Chapter 3: The Purpose of Cash Flow Forecasts
Four main purposes: planning, start-up support, obtaining finance, risk management
Benefits for different stakeholders
Limitations of forecasts
Chapter 4: Interpreting and Amending Cash Flow Forecasts
Standard structure of cash flow forecasts
Key calculations (net cash flow, closing balance)
Interpretation techniques and health indicators
Step-by-step amendment process with examples
Chapter 5: Causes of Cash Flow Problems
Lack of planning
Poor credit control
Extended credit terms
Overtrading
Unexpected events (economic shocks, competitor actions, operational disasters, regulatory changes, pandemics)
Chapter 6: Evaluating Methods of Improving Cash Flow
Bank overdrafts
Bank loans
Sale of assets
Debt factoring
Managing trade receivables
Delaying capital expenditure
Leasing equipment