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This allows the forecasting period to be weekly or even daily. Here, instead of using projected balance sheet accounts, large accruals are reversed and cash effects are calculated based upon statistical distributions and algorithms. The accrual reversal method (ARM), is similar to the ANI method. ![]() The pro-forma balance sheet (PBS) method directly uses the projected book cash account if all the other balance sheet accounts have been correctly forecast, cash will be correct, also.The adjusted net income (ANI) method starts with operating income ( EBIT or EBITDA) and adds or subtracts changes in balance sheet accounts such as receivables, payables and inventories to project cash flow.The three indirect methods are based on the company's projected income statements and balance sheets. This direct R&D method is best suited to the short-term forecasting horizon of 30 days ("or so") because this is the period for which actual, as opposed to projected, data is available. 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