tailieunhanh - Guide to Business Planning The Economist_6

Tham khảo tài liệu 'guide to business planning the economist_6', kinh doanh - tiếp thị, quản trị kinh doanh phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | PLANNING PROCESS 7 FINANCIAL MODELLING PLANNING PROCESS 7 FINANCIAL MODELLING In addition you need to Demonstrate tight control over costs vis-a-vis income Demonstrate that you can service debt Provide an adequate return on invested capital Retain earnings for growth You must therefore produce financial models to support these including Cashflow forecasts Projected profit and loss Expected balance sheets Funds flow statement The latter three statements are probably inappropriate for internal departments. Many organisations produce cashflows on a regular basis weekly for management purposes. PLANNING PROCESS 7 FINANCIAL MODELLING CASHFLOW FORECASTS These are estimates of the likely expenditure and receipts in cash terms over the next 12 months. Cashflow is vital to a business and anyone looking either to lend invest or extend credit to you will wish to see that the business can generate sufficient cash to cover its outgoings. An accurate cashflow will enable you to predict your financing needs allowing you to establish facilities in advance when lenders are more sympathetic rather than afterwards when they will be less so. Producing a cashflow forecast allows you to demonstrate that you have thought through the flows of cash not funds or profit . Interested parties can then challenge your assumptions your answers to these challenges will give them confidence that the assumptions and therefore the forecast are likely to prove .