A cash budget fails to alert the management for:

Question

Quizplus · Accepted Answer

A cash budget focuses specifically on the cash flows of a business, and as such, it is primarily a tool for managing cash flow and not profit levels. While a low projected cash balance would be identified by the budget, as would excess cash available for investment and sufficiency of cash for loan payments, these factors are not related to profit levels. Therefore, the cash budget fails to alert management on low profit levels.

A Cash Budget Fails to Alert the Management For