CASH BUDGET

PRESENTED BY: AKANSHA JAISWAL

ALAKCHCHENDR SINGH
MEANING OF CASH BUDGET

Cash budget is a schedule to

record cash inflows
And outflows over a period with a
view to locating the timing and
magnitude of cash surplus and
shortage.
 Definition of cash budget
A cash budget is a forecast of future
cash receipts
And cash disbursement over various
intervals of time.
James V. Home

Cash budget is an estimate of cash

receipts and disbursement for a
future period of time.
Guthman &
Dougal
 Importance of Cash Budget

 Cash is the nucleus or life blood in the working

capital management.
 Cash budget is a useful tool in the cash

management of organizations as it reveals

potential cash shortages as well as potential
periods of excess cash.
 It brings equilibrium between available cash

and the cash demanding activities –

operations, capital expenditures,etc.
 Advantages of Cash Budget

It ensures that sufficient cash is available
when required.

It reveals the expected shortages of cash, so
that action may be taken in time,e.g.,a bank
overdraft or loan may be arranged.

It shows whether capital expenditure projects
can be financed internally;or arrangement has
to be made borrowings.

It reveals the availability of cash so that
advantage may be taken of cash discounts.
 Methods of Cash Budget
There are three methods usually used in
preparation of cash budget. These
Methods are:

Receipts and payments Method.

Adjusted Profit and Loss Method.

Projected Balance Sheet Method.
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