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What are typical cash inflows and outflows in a cash budget? Why are non-cash items like depreciation excluded from the cash budget? What is the difference between a cash budget and a budgeted cash flow statement? Why is the opening cash balance important in a cash budget? 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? How do you calculate cash payments to suppliers? How is a cash budget structured/formatted?
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What is the difference between cash flow and profit?

Beginner

Answer

Profit is revenue less expenses on an accruals basis (recognized when earned/incurred), including non-cash items like depreciation. Cash flow is the actual movement of cash in and out. Timing differences (credit terms, inventory, capex, non-cash items) mean profit and cash flow differ, which is why both a P&L and a cash budget are needed.
Real-world example A sale on credit adds to profit immediately but to cash only when the customer pays.

Common follow-ups: What causes profit and cash to differ? | Why prepare both?

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All 34 Cash Budgeting questions