The reliability of a short-term cash forecast depends most heavily on the quality of:
A) Cost of goods sold forecast
B) Current ratio forecast
C) Sales forecast
D) Shares outstanding forecast

Question

Quizplus · Accepted Answer

The reliability of a short-term cash forecast primarily depends on the accuracy of the sales forecast, as it directly affects the amount of cash inflows. Without an accurate sales forecast, it would be difficult to predict the cash inflows accurately, leading to an unreliable short-term cash forecast. The cost of goods sold forecast and current ratio forecast may also have an impact, but not as much as the sales forecast. The shares outstanding forecast is not directly related to cash inflows or short-term cash forecasting.

The Reliability of a Short-Term Cash Forecast Depends Most Heavily