Home  Journals  Economic Analysis: Theory and Practice  3(570) - 2026 March

A comprehensive cash flow and profit forecasting model based on liquidity risk

Received: 2 March 2026

Accepted: 14 March 2026

Available online: 30 March 2026

Subject Heading: ANALYSIS OF FINANCIAL CAPITAL

JEL Classification: M21, M42

Pages: 182-194

https://doi.org/10.24891/jrexud

Subject. The relationship between cash flows and profits of an enterprise, manifested through the mechanisms of converting accounting profits into operating and free cash flows, which can become the basis for management regulation.
Objectives. Development of a scientifically based integrated model that links the forecast of operational and free cash flows with targeted profit growth, and the formation of methodological proposals for its application.
Methods. The research is based on systematic and integrated approaches, analysis, economic and mathematical modeling of profit and cash flow relationships. Regression analysis, scenario analysis, stress analysis, and dynamic optimization methods are used.
Results. A comprehensive forecasting and calculation model is proposed, reflecting the pattern that profit growth is steadily achieved not only by increasing revenue and return on sales, but also by accelerating the turnover of cash and receivables, as it reduces the need for borrowed capital. The developed model combines probabilistic forecasting of cash flows with optimization of working capital and payment calendar parameters. The developed indicator makes it possible to quantify the quality of profit transformation into free cash flow and use it as a target standard in decision-making. The formulated risk-oriented formulation of the task of maximizing the expected profit with limitations on the risk of a cash gap ensures reproducibility and sustainability of the decisions made.
Conclusions. Sustainable profit growth in modern conditions requires a transition from separate profit and liquidity management to an integrated forecasting and management circuit, in which cash flow is not a secondary consequence of profit, but an independent regulated variable that affects the cost of capital and the final net profit.

Keywords: flows, profit, forecasting, risk, liquidity

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