![]() ![]() Similarly, if there are any negative balances in the cash budget, the financing budget indicates the timing and amount of any debt or equity needed to offset these balances. If there are any unusually large cash balances indicated in the cash budget, these balances are dealt with in the financing budget, where suitable investments are indicated for them. ![]() ![]() It may also contain line items for fixed asset purchases and dividends to shareholders. The Uses of Cash section contains all planned cash expenditures, which comes from the direct material budget, direct labor budget, manufacturing overhead budget, and selling and administrative expense budget. The Sources of Cash section contains the beginning cash balance, as well as cash receipts from cash sales, accounts receivable collections, and the sale of assets. The cash budget is comprised of two main areas, which are Sources of Cash and Uses of Cash. The results of the cash budget are used in the financing budget, which itemizes investments, debt, and both interest income and interest expense. The inputs to the cash budget come from several other budgets. If not, management must find additional funding sources. This budget is used to ascertain whether company operations and other activities will provide a sufficient amount of cash to meet projected cash requirements. A cash budget itemizes the projected sources and uses of cash in a future period. ![]()
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