cash budget

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Cash budget

A forecasted summary of a firm's expected cash inflows and cash outflows as well as its expected cash and loan balances.

Cash Budget

An estimate of the expected cash inflows and cash outflows for a company or individual for a given period of time. A cash budget is vitally important because it measures the liquidity of a company (or individual) and therefore how much one can spend before beginning to have financial difficulties. See also: Budget.
Cash budgetor cash flow forecastclick for a larger image
Fig. 17 Cash budgetor cash flow forecast. A typical example.

cash budget


cash flow forecast

an accounting statement which analyses expected cash receipts and payments over forthcoming trading periods with a view to anticipating any potential cash shortages or surpluses before they arise and thus allow appropriate remedial action to be taken. This action could take the form of tightened CREDIT CONTROL to get cash in from customers more quickly, or arranging short-term loans in advance to cover an expected cash shortage, or plans to invest profitably any expected cash surplus. Fig. 17 shows a typical cash budget. See BUDGET, BUDGETING, BUDGETARY CONTROL.
References in periodicals archive ?
Managers seeking to improve analytical skills with new accounting and finance tools will find this handbook emphasizes learning thorough example, and teaches the basics of accounting form how to prepare a set of basic financial statements to interpreting profit, cash budgets, pricing strategies to suit different kinds of markets, and more.
Politicians that succeed in this area are rarely thanked; but the many that fail to get a grip on cash budgets never large enough to meet growing demand for services will find criticism falling upon their heads like a ton of bricks.
Following an introductory overview of financial planning and models, the text covers specific tools including interactive cash budgets and pro forma financial statements, valuation techniques, forecasting techniques ranging from simple averages to time series methods, Monte Carlo simulation, linear programming, and optimization.
This is because visitors from Africa are high quality key buyers with big cash budgets looking for high quality products and are a perfect match to the profile of Automechanika Middle East," Dehn observed.
The council has rejected any cuts in services spending or petty cash budgets.
Construct two additional monthly cash budgets using the different levels of new members and again assume that all cash flows occur on the 15th of each month.
He's also certain that it will be very difficult to repair that situation from the big spending days of the 90s, with every club having to work within strict, regressive cash budgets.
Manager Peter Jackson - whose side need a win at Cheltenham on Saturday to guarantee promotion to Division II - has already received projected cash budgets for squad building.
Cash budgets allow managers to easily compare anticipated cash inflows with anticipated cash outflows, and enable them to properly plan for sufficient balances of cash throughout the budgeted time frame.
For example, cash budgets for each division of a company can be included in the same file.
Cash budgets that are prepared in accordance with the Financial Accounting Standards Board 95 format, direct method, are extremely useful in that receipts and expenditures are presented according to operating, investing, and financing activities.
Cash budgets for the in-house negative costs are estimated at $260 million, $140 million for P&A costs and $80 million for the built-in overhead.