Unit 26 - Managing Business Information M3 analyse information produced in different formats to support business decision making. Please leave a review if you found this useful, thank you.
m3 analyse information produced in different formats to support business decision making
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Unit 26 - Managing Business Information
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Four types of software
Cash flow forecast
The cash flow forecast above was created using MS Excel. The cash flow forecast is
extremely important for businesses. A cash flow forecast is an estimation that a business
uses to plan what the inflows and outflows will be in a period of time, a business can use to
plan all its future revenue and expenditure. A business uses a cash flow forecast to clearly
see when It will need to make money arrangements such as borrow a loan from the bank
because the cash flow furcate shows any liquidy problems arising. The cash flow forecast
shows all the problems so a business can take actions and avoid making a loss. A cash flow
forecast helps a business to make sure that they pay all employees their wages and the
suppliers on time because the forecast shows all the outflows the business has to pay, so
this way the business will always remember to pay them on time. A cash flow forecast can
also be used to compare to a cash flow statements, a business can do this to see the
performance of it throughout the years and see what is causing any issues and what
changes should be made etc.
The MS excel is the most suitable software to produce a cash flow forecast. “Excel is a
commercial spreadsheet application produced and distributed by Microsoft for Microsoft
Windows and Mac OS. It features the ability to perform basic calculations, use graphing
tools, create pivot tables and create macros.” It is made up from columns and rows. These
rows are labelled with numbers and the columns are labelled letters. These columns and
rows create grids, each square is called a cell, in which a number or text can be entered. This
makes is easier to create a cash flow forecast, as the MS contains the right tools that are
required to create the cash flow forecast. MS excel also has automatic calculation, that can
be used by entering formula, this makes it easier to calculate the total income and total
expenditure of the company. There are also formulas to calculate the net profit or loss, by
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