GB110 Chapter 5: Chapter 5 Q&A

• School: Bentley University
• Department: Information and Process Management/General Business Courses
• Course: GB110
• Professor: Litchenstein

Document Summary

In chapter 5: money is used to power a business. A business cannot survive without cashflow inputs, therefore if you run short of cash one moment, the business might have issues in its daily activities. Cashflow forecasts allow businesses to make projections in order to avoid not having enough money for day to day operations at any point. They also budget departments of the business and give an idea of what amount of revenue will be generated: cashflow forecasts are important also because they attract investors. By looking at the financial documents, investors are able to see whether they should invest in the company or not and if so, what kind of profits would they be possibly making: pro forma means projections. In a business plan, when the business isn"t potential investors of what the business"s future looks like.