How Should an Accounting Department Assist in Cash Flow Forecasting

An accounting department should assist by:

Preparing forecasted balance sheets, income statements and cash flow statements with analysis of ratios compared to bank covenant requirements.

Forecasting net income and determining a dividend and distribution policy that meets the needs of both stockholders and creditors.

Providing assistance in preparing projected financial statements to obtain additional financing.

Restructuring loans and covenants and negotiating increases in their lines of credit.

Developing a plan (if the company is financially-challenged) that will enable them to continue current operations and retire outstanding bank debt.

Developing an overall business plan for use in obtaining financing.

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