Lecture 10 - Cash budget

Question 1

Reasons for cash budgeting:

Answer 1

1. Monitor cash flows and financing requirements
2. Planning for significant cash flows
3. Control over income and expenditure streams in line with the budget
4. Monthly management reporting of variances
5. Coordinate levels of working capital

Question 2

Cash budgets can identify…….and plan in advance

Answer 2

Surpluses and deficits of cash inflows