What are the advantages of cash flow forecasting?

What are the advantages of cash flow forecasting?
The advantages of cash flow forecasting are: 1.Cash flow is usuallymore pure. 2.Cash is a king. Once you are out of cash or you haveinsufficient cash to pay your interests or meet your workingcapital liabilities, you are bankrupt.


Cash flow forecasting is very important planning tool as by usingthis, management can foresee that when in future they are short incash so they can arrange enough liquidity before the situationarises as well as if they have more cash than their requirements,they can invest extra cash in short term securities and investmentsto earn some interest income from it.