When forecasting balance sheet financials, an unusually high forecasted cash balance suggests which of the following?
A) Sales are projected to increase in coming years.
B) The company will need to sell additional stock.
C) The company is generating a lot of cash, most typically from operations.
D) Account receivables have dipped to an unacceptable level.
E) None of the above

Question

Quizplus · Accepted Answer

An unusually high forecasted cash balance often indicates that the company is generating a significant amount of cash, typically from its operational activities. This suggests efficient operations, high demand for its products or services, or effective cash management strategies.

When Forecasting Balance Sheet Financials, an Unusually High Forecasted Cash