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What is a cash budget? Why can a profitable business run out of cash? What are typical cash inflows and outflows in a cash budget? Why are non-cash items like depreciation excluded from the cash budget? Why is the opening cash balance important in a cash budget? What is the difference between cash flow and profit? What is a receipts and payments budget? Why do lenders and investors often ask for a cash budget? What is a cash surplus and cash deficit in the context of a cash budget? How do you calculate cash receipts from credit sales?
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What is the difference between a cash budget and a budgeted cash flow statement?

Beginner

Answer

A cash budget is a detailed month-by-month receipts-and-payments schedule for short-term liquidity management. A budgeted cash flow statement summarizes cash by operating, investing, and financing activities in the standard statement format for the whole period. The cash budget gives operational timing detail; the cash flow statement gives a structured overview.
Real-world example Treasury uses the monthly cash budget to manage day-to-day liquidity and the cash flow statement for the annual view.

Common follow-ups: Which gives more timing detail? | What categories does the cash flow statement use?

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All 34 Cash Budgeting questions