What are the advantages and disadvantages of a cash flow forecast?

Explanation: What is a cash flow forecast? this is a rough estimate of a company's revenue, expenses and investment for a period of time. It enables a company to plan ahead to avoid any unexpected eventuality.

Advantages of cash flow forecast:

1. It helps a company have access to loans

2. helps to plan ahead for any unexpected payments or bills

3. Helps an organisation to forecast it financial state within a period of time.

Disadvantages of cash flow forecast:

1. its an estimate and not actual.

2. it does not take note of future payments.

3. It makes use of limited information

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