How To Define The Term Cash Flow Budget?
My explanation is to define cash flow budget.
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Cash flow refers to the different methods of investing, acquiring, borrowing, earning and spending cash or its equivalent in order to run an enterprise. This is done by breaking down during an operating cycle of an entity exactly how it acquired the new purchases of inventory and asset acquisitions (Balance Sheet Assets). How it may have, how it has handled it's liabilities by either increasing them for purchases or paying down the debts of a prior period (Balance Sheet Liabilities). How it has earned revenue (Income Statement Revenues), What it cost to generate the revenues (Income Statement Expenses) and what was earned by the company during the period and how much cash or its equivalent is left at the end of the period. This is not the complete and detailed version but a general explanation of what is cash flow and how a budget for cash flow would be approached.
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answered 6 months ago
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