An aspect of short-term financial planning is forecasting operating cash flow and ultimately the profitability of the company in the coming period.This type of financial planning typically uses forecasted ________.
A)earnings
B)income statements
C)working capital statements
D)All of these

Question

Quizplus · Accepted Answer

Short-term financial planning involves forecasting operating cash flow and profitability in the near future, which can be most accurately done by creating income statements with detailed projections for all sources of revenue and expenses. This is different from working capital statements, which primarily focus on the company's liquidity and ability to pay off short-term debts. While earnings may be a relevant factor in financial planning, they are not as comprehensive as income statements in predicting future profitability. Therefore, option B is the best choice for this question.

An Aspect of Short-Term Financial Planning Is Forecasting Operating Cash