Preparing Pro-Forma Cash Flow Statements
Introduction
Sometimes, Pro-Forma Cash Flow Statement is labelled a Cash Flow Projection or
simply a Cash Flow Statement. We will use a Pro-Forma Cash Flow Statement in
this section.
Effective cash flow management is essential to the continued health and survival of
any business.
Good cash flow management assists in:
Financial planning
Inventory purchases
Formulating credit and collection policies
Renewing business lines of credit
Making an effective presentation to your lender
Keeping on top of operating capital needs
Providing early indications of when expenses are getting out
of line