Why is a cash flow statement prepared for forecasted results and not on actuals like sources and applications?
February 12, 2009 by Accounts Receivable Factoring
Filed under Cash Flow
Can you answer costance o’s question about Factoring?:
What is the difference between sources and application of funds statements and cash flows statements. Why can’t a cash flow statement be prepared for the actuals and not on the forecasted results
Accounts Receivable Factoring
What is the difference between sources and application of funds statements and cash flows statements. Why can’t a cash flow statement be prepared for the actuals and not on the forecasted results
Accounts Receivable Factoring
Factoring Feedback: It depends on whether it is an actual cash flow statement or a forecasted cash flow statement. If you are trying to estimate the net present value of a company by calculating future cash flows, of course you will use forecasted future figures of sales etc. depending on how you estimate growth is going to be like. However, forecasted figures are also based on actual figures e.g. future sales are forecasted based not only on economic predictions but the past growth patterns.