A cash budget is a statement of planned cash receipts and cash disbursements.

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A cash budget is a projection of the cash inflows and outflows for a specific period, typically a month or a year. It helps organizations to plan and control their cash flow, anticipate potential cash shortages or surpluses, and make informed financial decisions. The cash receipts section of a cash budget includes all the sources of cash such as sales, loans, investments, and other incomes, while the cash disbursements section includes all the expenses such as wages, rent, utilities, taxes, and other payments. By comparing the two sections, a business can determine its net cash position, which is essential for maintaining liquidity and solvency.

A Cash Budget Is a Statement of Planned Cash Receipts