Budgeting & Forecasting › Cash Budgeting

How do capital expenditure and financing appear in the cash budget?

Intermediate

Answer

Capital expenditure appears as a lump-sum cash outflow in the month(s) the asset is paid for (from the capital budget), and related financing (loan drawdowns as inflows, repayments and interest as outflows) is timed accordingly. These large, lumpy items often drive the biggest swings in the cash position.
Real-world example A $200k machine purchase and the drawdown of a loan to fund it both appear in the relevant months.

Common follow-ups: Where does capex come from? | How is loan financing shown?