Cash Flow Forecasting

Cash flow is the lifeblood of any business. The concept describes how Cash flow forecasting can be used to avoid liquidity problems, and describes how to estimate the amount of cash required, how to know when it is required, for how long it is required, as well as an overview of the various forecasting techniques.

Technique Overview

Cash Flow Forecasting

Cash Flow Forecasting Definition

Cash Flow Forecasting is one of the three types of cash forecast (Graham and Coyle, 2000), balance sheet forecasts and income based cash forecasts being the other two. Cash Flow-based forecasts are estimates of the amount and timing of cash receipts and payments, net cash flows and changes in cash balances split by considered periods up to a year. It helps to manage daily cash flows. In fact, combining these dynamic account transactions and static account balances a company can yield the amount of cash remaining in bank accounts at the end of a period (Ray, 2010).

Cash Flow Forecasting Description *

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Business Evidence

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Business Application

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Success Factors of Cash Flow Forecasting *

Measures of Cash Flow Forecasting *

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Professional Tools

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Further Reading

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Cash Flow Forecasting References (4 of up to 20) *

  • Browning, R. (2011) Amazon’s Lovefilm Cuts Nordic Cash Forecast on Weak Growth. BusinessWeek, Oct 5. Available at: [Accessed on 22 November 2011].
  • Graham, A., Coyle, B. (2000) Cash Flow Forecasting and Liquidity. Global Professional Publishing.
  • Horcher, K.A. (2005) Essentials of Managing Treasury. John Wiley and Sons.
  • Kaplan, S.N., Ruback, R.S. (1995) 'The Valuation of Cash Flow Forecasts: An Empirical Analysis'. Journal of Finance, 50, pp.1059-1094.

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