Planning for Cash Flow
This financial forecasting method estimates the number of units sold based on past performance, market trends, and economic expectations.
What is sales and revenue forecasting?
Setting measurable financial goals for profitability is part of defining these.
What are profit objectives?
The process of preparing and organizing financial estimates for a company’s expenses, revenue, and cash flow.
What is budgeting?
This type of planning helps businesses optimize their tax obligations and take advantage of depreciation and credits.
What is tax planning?
This type of funding covers immediate operational needs and short-term cash flow gaps.
What is short-term cash?
These types of expenses remain constant regardless of sales volume, including rent, utilities, and insurance.
What are fixed costs?
This analysis determines how much revenue is needed to cover all costs before a company begins making a profit.
What is break-even analysis?
The misconception that budgeting is restrictive or a waste of time often prevents businesses from seeing its full benefits.
What are budgeting misconceptions?
Aviation companies monitor competitors to decide whether to match new services, lower prices, or innovate.
What is competition analysis?
Funding from investors in exchange for ownership stakes is known as this.
What is equity financing?
This type of financial analysis is commonly used in new businesses or those with irregular cash flow.
What is month-by-month cash flow analysis?
The financial document summarizing revenue, expenses, and net income over a specific period is known as this.
What is an income statement?
The budgeting process includes developing, preparing, assembling, and approving these.
What are budgets?
Businesses retain a portion of profits to help sustain operations during economic downturns.
What are retained earnings?
This federal agency helps small businesses obtain funding through loans and guarantees.
What is the Small Business Administration (SBA)?
Aviation business managers must consider both national and local trends before deciding on these figures.
What are next year’s sales volumes?
Aviation companies can improve cash flow by requiring these payments upfront for services such as flight training.
What are advance deposits?
This financial planning document predicts a company’s expected revenues and expenses for a given period.
What is a forecast budget?
Identifying new ways to generate income beyond traditional services is an example of seeking these.
What are new revenue sources?
Businesses often extend this to customers to increase sales and provide flexible payment options.
What is credit?
Fuel, maintenance, and crew wages that fluctuate based on operational activity fall under this expense category.
What are variable costs?
This financial report provides a snapshot of a company’s assets, liabilities, and equity at a given moment.
What is a balance sheet?
A business should use these additional financial plans to support the overall budget.
What are support budgets?
This financial metric helps businesses assess profitability by comparing revenue to total expenses.
What is the profit margin?
This method of financing allows a company to lease equipment instead of purchasing it outright, helping preserve cash flow.
What is leasing?