AS 91868 · 4 credits · Internal
Cash flow forecasting
Demonstrate understanding of cash flow forecasting for a business
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This standard is about predicting how much money will flow in and out of a farm or agricultural business over time. You'll need to use software to create a cash flow forecast showing future receipts and payments, then show how external factors (like price changes or bad weather) would affect those numbers and what the business might do about it.
What to do, grades and common mistakes
- ·Use software to create a cash flow forecast that shows when money comes in (receipts) and goes out (payments) for the business
- ·Identify an external factor that could change the business's cash flow (such as price changes, exchange rates, weather conditions, or financing costs)
- ·Show how a variation in that external factor would alter the forecasted cash flow numbers
- ·Explain what effect that change would have on the business
- ·Describe what actions or responses the business could take in response to the variation
You use software to create a cash flow forecast, identify how an external factor would change it, and explain what impact that has on the business.
You go further by explaining more than one possible response the business could make to the external factor and its variation.