A financial manager needs to know if any of the credit sales will not be paid by customers.This situation will entail a reduction in the estimate of the cash flow due to "bad debts."

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Bad debts refer to the amount of credit sales that will not be paid by customers, which means that the company will not receive the expected cash flow from these sales. Therefore, bad debts can reduce the estimate of cash flow and have an impact on the company's financial management.

A Financial Manager Needs to Know If Any of the Credit