What is a cash flow projection?

A cash flow projection is specifically designed to estimate the cash inflows and outflows over a specific period. This involves forecasting the timing and amount of cash the business expects to receive (inflows) and the cash the business will need to pay out (outflows), providing critical insights for managing financial operations.

These projections are essential for effective cash management, helping businesses understand their liquidity position, plan for future expenses, and ensure they have sufficient cash to cover operational costs. By focusing on cash movements rather than just accounting profits, businesses can make informed decisions about investments, expenses, and financing needs.

The other options focus on different concepts: a report detailing past performance looks back at historical data rather than forecasting; an estimate of future revenue and expenses does not necessarily capture the cash timing dynamics; and predictions of stock price movements pertain to market trends rather than cash flow management.