Identify the following forecasting horizons.

_________________Used to establish and manage target balances for bank compensation.

_________________ Used to determine the companys need for short-term credit or availability of funds for short-term investing.

_________________Used as a benchmark to compare actual to projected cash flows on the cash budget.

_________________Used by financial institutions and rating agencies for credit analysis.

Which is a step in arriving at the projected closing cash position?

A. Starts with the next periods closing bank available balance

B. Deduct the expected settlements in collection and concentration accounts

C. Deduct projected disbursement totals

D. Find historical data on clearings of disbursements from non-controlled disbursement accounts

Which validation method tests a forecast using data that were not made to develop it, i.e., comparing forecast to actual results?

A. In-sample validation

B. Out-of-sample validation

C. Ongoing validation

D. Documentation of the process

Complete the percentage-of-sales pro forma statement forecasting steps:

Forecast ___________.

Calculate projected ending cash balance by projecting [step 1] cash impact.

Compare projected ending and target __________ and adjust pro forma statement to show fund source for shortfall or investment of surplus.

1. income statement and balance sheet; 3. cash balance

1. cash flow statement; 3. cash balance

1. income statement and balance sheet; 3. profit

1. cash flow statement; 3. profit

5.What is another best practive in cash forecasting?

Use appropriate detail

Use appropriate platform

Invest the appropriate amount of resources

Validate the forecast

Cooperate and communicate

Ensure the forecast is usable

A. If a sophisticated treasury forecasting system exists, use it for all forecasts

B. Allow each business unit to develop terminology and expectations

C. Accuracy is always more important than timeliness

D. Disclose assumptions

6.Given the following two pro forma statements, create a Pro Forma Cash Flow Statement to show the projected ending cash balance?