Cash budget

Submitted byVijay dilip somase

Guided by Prof khairnar mam

Cash Flow BudgetingCash flow budget used for?

What items are included in cash inflows and cash outflows?

What adjustments can be made in cash balance?

A cash budget is prepared to

Monitor the timing of cash IN cash OUT Make sure there is enough cash

available See if and when a bank overdraft is

required Plan the timing of the purchase of a

fixed assetsAvoid a negative cash flow situation

Methods Of Cash Budget

Cash InflowsSales and other cash incomeNew loans receivedSales of capital assetsNonfarm incomeBeginning cash on hand

Cash OutflowsCash expensesPrincipal paymentsPurchase of capital assetsNonfarm expensesEnding cash on hand

Do not include:DepreciationOpportunity costsAny other noncash income or expense

Cash Flow Budgets Can Be:

Annual Quarterly Bi-monthly Monthly

1. Estimate cash inflows and outflows for the entire year first.

2. Distribute the annual totals among the periods within the year.

Preparation of cash budget

Estimating cash receipts

Cash sales Collection from debtors Interest / dividends on investment Sale of assets etc Loans, advances, deposits, etc

Preparation of cash budget

Estimating cash payment

Payment for purchases Payment of overheadsPurchase of assets Payment of creditors Payment for taxes Payment for dividends/interest etcRepayment of loan / advances / deposits etc

Budget within the year

Jan-Feb

Mar-Apr

May-June

July-Aug

Sep-Oct

Nov-Dec

CashInflows- Cash Outflows= Balance

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