All 34 Cash Budgeting questions
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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? How do you calculate cash receipts from credit sales? How do you calculate cash payments to suppliers? How is a cash budget structured/formatted? What actions can management take if the cash budget shows a shortfall? What can management do with a forecast cash surplus? How does the cash budget link to working capital management?
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Budgeting & Forecasting › Cash Budgeting

What is a cash surplus and cash deficit in the context of a cash budget?

Beginner

Answer

A cash surplus is when projected receipts exceed payments, raising the closing balance (cash to invest or deploy); a cash deficit is when payments exceed receipts, lowering the balance (possibly below zero, needing finance). The cash budget highlights the months of each so action can be planned.
Real-world example The budget shows a surplus in busy months and a deficit in the quiet season needing overdraft cover.

Common follow-ups: What can you do with a surplus? | What does a deficit require?

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All 34 Cash Budgeting questions