Being able to forecast future cash receipts and future cash disbursements is critical in being able to determine if and when you might be facing a cash crunch or a cash surplus. Since cash is the lifeblood of a business, properly monitoring cash inflows and outflows is critical to keeping your business running smoothly and without disruption. Imagine you are part of a growing company. You are feeling a little bit of a cash squeeze as you purchase and pay for inventory often before you are able to sell it. You can see that your cash reserves are slowly dwindling, and eventually you may need some external financing. As you consider visiting your local banker for a loan, you realize that the banker will need information relating to when and how the bank loan will be repaid.

If you were the banker, what information would you want from a company to evaluate their riskiness and their ability to repay a loan? What specific information would you need to begin a cash receipts forecast? Identify three items that would be helpful.