As a financial manager, Garry wants to know when his firm will need to arrange for short-term financing and when the firm is likely to have surplus cash available to pay off loans or to invest in short-term liquid assets. These concerns suggest that Garry would want to develop a:
A)cash budget.
B)pro forma income statement.
C)sales forecast.
D)projected balance sheet.

Question

Quizplus · Accepted Answer

A cash budget is a financial statement that shows expected cash inflows and outflows over a specific period. It provides a detailed analysis of when the firm is likely to have cash surpluses or deficits, allowing Garry to plan for short-term financing or investments accordingly. Pro forma income statements and projected balance sheets provide information about expected profits and financial position, but they do not focus specifically on cash flows. Sales forecasts are important inputs to the cash budget, but they do not provide a complete picture of cash inflows and outflows.

As a Financial Manager, Garry Wants to Know When His