Cash budget

The cash budget is a projection of anticipated cash flows. Because cash is so vital, this budget is often considered to be most important financial budget. The cash budget contains the three sections (cash receipts, cash disbursements, and financing) and the beginning and ending cash balances.

A cash budget contributes to more effective cash management. it shows managers when additional financing is necssary well before actual need arises. And, it indicates when excess cash is available for investments or other purpose.

Cash budget is the budget that shows cash inflows and outflows during a period of time.

Share it:  Cite

More from this Section

  • Contingent liability
    Contingent liability is a potential liability that may become an actual liability in the ...
  • Retained earnings
    Retained earnings are net income that a corporation retains for future use. Net income ...
  • Straight-line method of amortization
    Straight-line method of amortization is a method of amortizing bond discount or bond premium ...
  • Inventory Systems
    A merchandising company keeps track of its inventory to determine what is available for ...
  • Cash dividend
    A cash dividend is a pro rate distribution of cash to stockholders. For a corporation ...