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Why is cash-flow estimation important while preparing a business plan?

Answer and explanation

Correct answer: To manage payments and expenses on time

Cash-flow estimation shows when money is expected to enter and leave the business. A venture may show accounting profit but still lack cash when wages, rent, suppliers, or loan instalments must be paid. Forecasting helps identify shortages, plan payment timing, and arrange funds responsibly. Logo design, names, and copying competitors do not serve this financial purpose.

Related tags

Cash-FlowFinancial-PlanningFinancial PlanningFinancial ManagementBusiness StudiesClass 12 Mcq

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