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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.

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