Sales Forecasting and Cash Flow
Sales Forecasting and Cash Flow: BUS 402 week 7 discussion “Sales Forecasting and Cash Flow”Please respond to the following:
- An important step in developing a projected (pro forma) income statement is to create a sales forecast and calculate anticipated revenue for the business. Imagine you are creating a business—develop a sales forecast and estimate revenue for the first year of operation, and describe the process you used to arrive at your estimates.
- The three (3) primary causes of cash flow problems in a business are accounts receivable, accounts payable, and inventory. Imagine you are creating a business—identify one (1) cause of cash flow problems that you believe will be the most challenging for your company. Next, discuss the strategies you will use to mitigate problems in this area.
Answer preview
The sales forecast is derived based on the expected consumer’s expenditures. The method used to reach the estimates is through observation of the consumers’ expenditure behaviors (Trapero Kourentzes, & Fildes, 2015). Although women would generally spend money on clothing throughout the year, a market forecast shows that the monthly expenditure is the highest for the period between Oct-Dec defined as the festive period. The figures are based on the customers own expenditure plan obtained through interviewing 100 women between the age of 18-45 with income higher than the federal…
(400 words)