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

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Related Entries

• 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)
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• Financial Planning as One of The Key Finance Roles (Part 3)