Final answer:
A cash flow forecast helps a company avoid financial problems, make better financial decisions, and improve profitability.
Step-by-step explanation:
A cash flow forecast helps a company to avoid financial problems, make better financial decisions, and improve its profitability. By accurately predicting the inflows and outflows of cash, a company can plan its expenses, identify potential cash shortages, and take necessary measures to address them.
For example, if a company forecasts a cash shortage in the future, it can arrange for additional financing or adjust its spending to avoid financial difficulties.