Cash Budget represts the amount of estimated cash inflows, estimated cash outflow and deficits/surplus over a given budget period.

1. Cash Budget

2. Cash Budget represts the amount of estimated
cash inflows, estimated cash outflow and
deficits/surplus over a given budget period.

3. Basis of cash Budget
Cash budget is based on-
1.Sales budget
2.Direct material purchase budget
3.Direct labour cost budget
4.Production overheads budget
5.Administrative cost budget
6.Selling & Distribution cost Budget

4. Importance of Cash Budget
1. It enables the management to determine the timing when there
is likely to be a surplus/ shortage of cash.
2. It enables the management to determine the quantum of
surplus/shortage of cash.
3. It enables the management to determine the period for which
the situation of shortage / surplus is likely to be continued.
4. It enables the management to perpare the borrowinf schedule.
5. It enables the management to plan for financing a new project.
6. It enables the management to take advantage of cash discount.

5. Methods of preparation
Two popular Methods of preparing cash
Budget are:
1.Receipts and payment Methods
2.Adjusted Net Income Method

6. Methods of preparation
Two popular Methods of preparing cash
Budget are:
1.Receipts and payment Methods
2.Adjusted Net Income Method