Question
Differentiate between cash flow projection and cash flow statement.
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Basis
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Cash Flow Projection
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Cash Flow Statement
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Period
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The Cash Flow Projection shows the cash that is anticipated to be generated or expended over a chosen period of time in the future.
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Cash Flow Statement, like Balance Sheet and Income Statement, deals with the past.
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Tool
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Cash Flow Projection, is a very critical management tool for the successful operation of the business.
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The Cash Flow Statement shows how cash has flowed in and out of your business. In other words, it describes the cash flow that has occurred in the past.
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Importance
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It does helps in managing the current, day to day requirement.
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It does not help in managing the current, day to day requirement.
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Flexibility
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Flexibility is there to the extent.
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No chance of flexibility.
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Decision making
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New decisions and policy can be implemented for future growth.
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Helpful to take further decision.
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Value points
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Self-control, national awareness, faithful justice, awareness of responsibility of entrepreneurs, initiative, self-confidence.
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Team work, awareness of responsibility of employees, service to others.
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