Please read and watch this series from the beginning - Business Planning 101 Intro and Sales Forecast
As mentioned in previous posts, cash is King! A healthy cash flow should allow a business to meet all of it's liability, expense and supplier commitments and have cash left over! The cash flow forecast takes into consideration the current balance of any cash (bank accounts, cash in hand, etc.), outgoing cash (loan payments, expenses, etc.) and incoming cash (sales, etc.) to forecast what available cash there will be at some point in the future. For example, you could compile a cash flow forecast to estimate how much available cash the business will have in a months time. The cash flow forecast in a business plan mainly ensures that there will be available cash throughout the life of the business or the amount planned in the business plan.