Walk me through a 13-week cash flow forecast.
A core Restructuring interview question — asked in analyst and associate interviews across IB, PE, and the Big 4.
THE SHORT ANSWER
Start with opening cash balance. For each week, project inflows (customer collections based on AR aging, other receipts) and outflows (supplier payments per AP aging, payroll, rent, taxes, debt service). Calculate net cash flow, add to opening balance to get closing balance. Adjust for minimum cash target, identify funding gaps or surplus. Update weekly with actuals and revise forecast.
WHAT INTERVIEWERS LISTEN FOR
- ✓Start with opening cash balance
- ✓Project weekly inflows and outflows
- ✓Calculate net cash flow and closing balance
- ✓Adjust for minimum cash target
- ✓Update and revise weekly
COMMON MISTAKES
- ✗Ignoring timing of collections and payments
- ✗Not updating with actuals
- ✗Overlooking non-operating cash flows
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