Module 3 Cash Flow Estimation BHS427 Health Care Finance (AUG2014-1) Essay - 1

staff 3 coin Flow Estimation BHS427 Health C atomic number 18 Finance (AUG2014-1) (SLP) - Essay ExampleSecondly, the backup needs to look at some of the investments made by the organization in terms of creating afterlife growth. Failure to outlay the investments made by the organization may result in the investments being reason as capital expenditures (Damodaran, 2011).In the estimation of cash flows, certain advantages and disadvantages may arise from the entire process. Cash flow estimation is seen as a way of attaining an organizations determine or identify of return (Juhsz, 2011). Cash flows in and out of an organizations projects are often used as inputs in various financial models, which in turn, assist an organization in determining the overall value placed on certain projects. Also, a businesss liquidity can be placed through cash flow estimation. It is imperative for businesses to find out if there is the availability of cash at hand, regardless of whether the bus iness or organization is making profits from its operations. Cash flow estimations may bode if the business is likely to fail, especially if they predict a shortage of cash in the business. Furthermore, cash flows are often used to assess the worth of income generated from certain projects (Damodaran, 2011).What this implies is that some of the projects carried out by organizations or businesses may fail to bring in the required or intended organizational targets, which means they may be of low quality. Cash flows provide the intended forecast to prevent long-term investments in such projects, which means that most organizations are capable of conducting operations that are composed of large cash items often considered broad(prenominal) quality. Lastly, cash flows determine the risks involved with certain projects. Negative earnings need to be identified in cash flow estimations because they tend to become problematic at the end of a financial period. In this case, earnings need t o be adjusted to reflect the effects of the accounting management. When an