Short-Term Financial Planning - Cash Budgeting - Preparing the Cash Budget

4 important questions on Short-Term Financial Planning - Cash Budgeting - Preparing the Cash Budget

What are the 3 steps to prapare a cash budget?

1. Forecast sources of cash
2. Forecast uses of cash
3. Calculate the cash balance

What are the 5 uses of cash categories - Step 2: Forecast uses of cash

1. Payments of accounts payable
2. Increase in inventories
3. Labor, administrative and other expenses
4. Capital expenditures
5. Taxes, interest and dividend payments

What is the formula for the forecast net inflow of cash?

Forecast net inflow of cash = Cash sources - cash uses
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Wat are forecast sources of cash?

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