CAT / FIA FFM Syllabus B. Cash Budgeting - Cash budget - Notes ^{1 / 6}

A cash budget is an estimate of the receipt and payments of cash in and out of the business for a defined future period.

By understanding the nature and timing of cash receipts and expenditures, management is better able to influence them and plan/budget for the future.

The purpose is to ensure that the company has sufficient cash on-hand to avoid missing disbursements when they fall due.

There are statistical techniques which assist management in planning cash levels.