New businesses trying to secure a loan may also require a cash flow forecast. Projecting future cash flows can give you greater financial control, provide a deeper understanding of a company’s performance, help identify shortfalls in advance, and support business planning so that activities and resources are properly aligned. Financing Activities: This section may include activities such as receiving money from creditors or shareholders, repaying loans and paying dividends, and selling company stock, as well as other activities that impact equity and long-term liabilities.Ī statement of cash flows can summarize information for any accounting period, but if you’re starting a new business or planning for the months ahead, creating a cash flow projection can help you anticipate how much money your business will have coming in and going out during a future time frame.
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