Suppose senior management asks you to prepare a short-notice cash flow forecast for the next 6 months to support a potential investment decision, but some operating departments are slow in providing accurate data. How would you structure the forecast, deal with incomplete information, and communicate the reliability of your projections?

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VirtualInterview.AI · Accepted Answer

In that situation, I’d start by structuring the forecast top‑down, anchored on what I can trust most: recent actuals, contracted revenues, and fixed/committed costs. I’d build a 6‑month weekly or monthly cash model with three views: base case, conservative case, and upside, and clearly separate recurring from discretionary cash flows.

For the slow departments, I wouldn’t wait. I’d use run‑rate assumptions based on the last 3–6 months, adjusted for known changes (seasonality, signed contracts, announced headcount changes). Any estimate I make gets tagged with a confidence level and documented assumptions. When the late data comes in, I roll it in and show the variance.

With senior management, I’d be very explicit: “80% of this forecast is based on hard data, 20% on modeled assumptions.” I’d highlight the cash low point, headroom vs. our minimum liquidity buffer, and show a simple sensitivity table so they see how robust the decision is under different scenarios.

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