For financial planning purposes, the Income Statement is prepared by importing data from the cash flow. The methodology allows the preparation of projected financial statements directly from the cash flows. Thus, utmost attention to the quality of the cash flow is mandatory so to have quality financial statements.
When performing financial planning we do not consider accruals, creditors, debtors, prepayments as these transactions are performed when carrying out accounting processes but not planning processes, which are done on a cash basis, namely, transactions are performed on the periods shown in the cash
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