What is a Cash Budget?
How Does a Cash Budget Work?
A cash budget is a planning tool used by companies and individuals to evaluate projected cash flows during a specified period of time (e.g. monthly, quarterly, annually).
For example, if a company's cash budget forecasts itemized inflows (income) of $1,000,000 and itemized cash payments (expenses) of $800,000, management can feel fairly certain that it will have enough cash to pay all of its bills.
Why Does a Cash Budget Matter?
A cash budget allows companies and individuals to evaluate income versus expenses. Managing cash resources is the first step toward growing a company or individual's bottom line. Moreover, lending institutions may use a cash budget to help determine whether or not to grant a loan or extend credit to a company of individual, which makes monitoring cash flow even more important.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
The old adage “You get what you pay for” is one we've heard all our lives, probably since we were first introduced to money....Read More →
After home, auto, health and life insurance, most people don't give insurance much thought. While there's obvious value in...Read More →
Forget what you've heard, debt-laden companies offer great turnaround potential if you know what to look for. For...Read More →
We're so used to the idea that we need $1 million or $2 million to retire, that we forget about the real issue when it comes to our retirement spending. There's...Read More →