Cash Flow Forecasting I Introduction - Working Capital Management

In managing working capital efficiently and effectively, the primary concern of management remains to provide adequate amount of liquidity to the firm. This requires not only analysis and evaluation of how the firm has performed in the past but also proper planning and monitoring in this respect.

Liquidity is represented by net working capital in the fund flow analysis and by cash and cash equivalents in the case of cash flow analysis and both of these measures are based on balance sheets that reported items as on a particular date. Here we shall discuss the dynamics of business liquidity and the nature and role of cash flow forecasting in managing liquidity facet of working capital management in a firm.


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Working Capital Management Topics