How an Accounting Department Should Assist in Cash Flow Forecasting:

1. Prepare forcasted balance sheets, income statements and cash-flow statements plus ratios-analysis to be compared to bank covenant requirements.

2. Forecasting net income and determining a dividend and distribution policy meeting the needs of stockholders and creditors.

3. Prepare projected financial statements if seeking to obtain additional financing.

4. Restructuring loans and negotiating increases in their lines of credit.

5. Developing a plan to enable the company to continue current operations and retire outstanding debt.

6. Developing a Business Plan for use in obtaining financing.