The reliability of 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 short-term cash forecast depends most heavily on the quality of sales forecast, as cash inflows are generated from sales. Accurately forecasting sales can help determine the cash that will be received in the future and aid in managing short-term cash needs. While the cost of goods sold forecast may impact cash flow indirectly, the sales forecast is more directly tied to cash inflows. The current ratio and shares outstanding forecasts are important for overall financial analysis but do not directly impact short-term cash forecasting.

The Reliability of Short-Term Cash Forecast Depends Most Heavily on the Quality