In this course we explore cash flow forecasting at its most basic level. We assume little or no forecasting experience by participants, or a desire to improve their cash flow forecasting.
We begin with a description of a common structure for cash flow forecasting and then fill in the pieces – information, sources, etc. – that are necessary for an effective forecasting system. We discover that most short-term forecasting methods are not complicated. We discuss how to identify potential sources both personal and computer. We break down data to explore how valuable the data items are to the overall forecast.
Acknowledging that we may not be able to find sources for all items, we introduce short-term forecasting methods that can be used in conjunction with estimates from “knowledgeable” sources. For example, some methods can be used to translate a data item to a forecasting variable. In this way we ask our sources to estimate what they know, and we can then translate the information into the form we need for the forecast. Finally, we gather up all of the pieces we identify and construct a basic forecasting template.
Review Questions: Fundamentals of Cash Flow Forecasting
FINAL EXAM: Fundamentals of Cash Flow Forecasting
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Kenneth L. Parkinson
Managing Director, Treasury Information Services, LLC
Mr. Parkinson is managing director with TIS. He is an experienced consultant, educator, writer, and financial manager. His experience as a consultant and as a corporate treasury manager has included development and implementation of major treasury systems in both mainframe and PC environments. As a treasury manager, he evaluated and selected treasury services from commercial and investment banks and other providers worldwide. As a treasury consultant, he has worked closely with clients to select appropriate banking services, evaluate bank service charges, and design effective treasury systems. He has provided advisory services to major commercial banks to help in assessing market acceptance of new products and in solving current customer problems. He has surveyed the system and banking service needs of small and large firms. He has also led industry focus groups and conducted customer roundtables and product demonstrations for major banks.
Mr. Parkinson has been a visiting/adjunct professor of finance at the Stern School of Business at New York University for more than a decade. He has taught undergraduate and graduate courses in introductory finance, working capital management, financial e-commerce, and (long-term) corporate finance. In addition to his teaching at Stern/NYU, his teaching and training experience includes work with Duke University, University of North Carolina, Fairleigh Dickinson University, American Institute of Certified Public Accountants and state CPA societies across the country, American Management Association, Association for Financial Professionals (with its predecessor groups), Treasury Management Association of Canada, regional treasury management associations across the country and in Canada, National Association of Credit Management, Operations Research Society of America/The Institute of Management Science, Business International, and IBC (London, UK).
He has authored, co-authored or made major contributions to more than a dozen books on cash management, including Optimizing Bank Relations, Preparing for Treasury Management Certification, How to Prepare an RFP for Treasury Services, Managing Bank Relations, Corporate Liquidity, Cash Management Templates, Essentials of Cash Management (2nd and 3rd eds.), and Treasury Manager’s Guide to the Internet. He has served as editor-in-chief of the Journal of Cash Management, technology editor and contributing editor with Corporate Cashflow magazine, senior editor with Business Credit magazine, and co-editor of The Treasury Pro, a monthly newsletter. Mr. Parkinson holds a BS degree from The Pennsylvania State University and an MBA degree in international business from the Wharton Graduate School of Business at the University of Pennsylvania. He was part of the team that originally developed the CCM exam and is a permanently certified cash manager.
His prior experience includes RCA Corporation, where he served as a corporate financial manager (assistant treasurer), and Deloitte & Touche, where he served as a management consultant.