Hoggard Organics' UK debut

A cash-flow forecast may predict the future, whereas a cash-flow statement describes what actually happened in the past. As predicting the future is not an easy task, constructing a cash-flow forecast may be quite difficult.

Cash-flow forecasts are important to a business because they enable it to foresee times in the future when the business will be short of money. If shortages are anticipated, the business may be able to prevent it happen.

Refer to the case study, all Hoggard Oanics’ shop managers in the UK which have done a cash-flow forecast; they may identify potential cash-flow problems in advance. They may also guide the firm towards the appropriate action. Also, it may make sure that there is sufficient cash available to pay suppliers and creditors and to make other payments is an important point. It can help to borrow money in a easy way.

But there are also some problems which using cash-flow forecasts, sales if organic food grew rapidly in the USA and had exceeded 8000 million pounds per annum, so they might have the same situation in the UK, there maybe a large number of competitors, changes in the economy, because it is a niche market, so there maybe a sudden changes in consumer taste and inaccurate market research etc…

Budget is an agreed plan establishing, in numerical or financial terms, the policy to be pursued and the anticipated outcomes of that policy. Using a budget can provide direction and coordination, it may also motivate staff and improve the efficiency. Once it motivate the staffs, and they will work harder, and there maybe a increase in productivity.

But there might be some drawbacks also, for example, because it is a niche market, not much people were working for this job before, they maybe senior manager, the allocation maybe inappropriate if imposed by them, also allocations maybe incorrect because circumstances have changed from time to time.