The document discusses the purpose and components of a cash budget. A cash budget projects sources and uses of cash over a future period to determine if a company will have enough cash to meet its needs. It contains a beginning cash balance as well as projected cash receipts from sales, collections, and asset sales. It also includes planned cash expenditures from budgets like materials, labor, overhead, selling and administration. The cash budget calculates any excess or deficiency and determines if additional financing is required.

1. Presentation…
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3. The cash budget contains an itemization of the projected
sources and uses of cash in a future period. This budget is
used to ascertain whether company operations and other
activities will provide a sufficient amount of cash to meet
projected cash requirements. If not, management must find
additional funding sources.

4. The cash budget is comprised of two main areas, which are
Sources of Cash and Uses of Cash. 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 Uses of Cash
section contains all planned cash expenditures, which
comes from the direct materials budget, direct labor
budget, manufacturing overhead budget, and selling and
administrative expense budget. It may also contain line
items for fixed asset purchases and dividends to
shareholders.

5. Determine the beginning cash balance
Add receipts
Deduct disbursements
Calculate the cash excess or deficiency
Determine financing needed and
Establish the ending cash balance.

6. CASH BUDGET
XYZ COMPANY
ESTIMATED STATEMENT OF CASH RECEIPTS AND
DISBURSEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
JAN FEB MAR APR
Estimated cash balance at the beginning of the
period..
Estimated cash inflows:
Cash Sales..
Collections on credit sales...
Bank Loans..
Total Inflows
Estimated cash outflows:
Payments to suppliers..
Payments of operating and other expenses..
Payments on equipment loan and interest..
Payments on bank loans and interest..
Dividends..
Investment in short-term securities..
Total outflows
Estimated cash balance at the end of the period..