Factors To Consider In Sales Forecast,Production And Cash Forecast (Part 3 of 3)

Continued from Part 1 &2 on Sales and Production Forecast,append below a suggested checklist of what factors and the sources might be considered when constructing the Cash Forecast

Cash Forecast

Factors:

• How long a period the forecast will cover?
• Past cash forecasts;
• Demand for the products;
• Supply of raw material;
• Credit control policy of company and government;
• Overtrading condition;
• Influence of external factors like bad weather,short supply on price of resources;
• Cost of finance;
• Running cost;
• Credit terms;
• Investment opportunities;
• Level of activity;
• Raising finance;
• Profit;
• Major future commitments such as capital expenditure,and research and development;
• Expansion or political condition;
• Payments to suppliers or repayment of loan;
• Receipts from sale of assets,dividend received and collection from customers;and
• Previous cash balance

Sources of Information:

• Past cash forecast;
• Cash controller and departmental managers;
• Other forecasts such as sales,production,expense,capital expenditure,profit &loss and balance sheet;
• Economic indicator like consumer price index and various publications;
• Journals,press reports,etc and
• Statistical techniques

• Factors To Consider In Sales Forecast,Production And Cash Forecast (Part 1 of 3)
• Factors To Consider In Sales Forecast,Production And Cash Forecast (Part 2 of 3)
• What is Cash Operating Cycle And Ways To Improve Cash Flows
• Purpose of Financial Forecasting
• Why Do We Need To Keep A Proper Sales Ledger To Help In Credit Management
• Factors Affecting Pricing(Part 1)
• What Factors To Consider When You Increase The Credit Limit Of A Customer