Accounting › Section T · Budgeting › Topic T.3
Financial budgets and the cash budget
A profitable plan can still run out of cash, because customers pay later than sales are made and big purchases fall due all at once. The financial budgets show when cash will be short, how much to borrow, and what the balance sheet should look like at the end of the year.
In this topic
- From operating plans to cash and position
- The capital expenditures budget
- The cash collections schedule
- The cash payments schedule for materials
- Other cash payments
- How the cash budget works
- Worked example: Q1 and Q2
- Worked example: Q3 and Q4
- The budgeted income statement
- The budgeted balance sheet
- Common mistakes to avoid
- Key takeaways
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