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Cash Budget

How does the timing of cash receipts and disbursements affect cash budgeting? Is it possible for an organization to be profitable and run out of cash? How?

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The old saying goes, "you have to spend money to make money," and just about every company has to raise funds at some point to develop products and expand into new markets. Thus sometimes a negative cash flow results from a company's growth strategy in the form of expanding its operations. The money is required to fund two aspects of business:
1. Long term assets for expansion
2. Net working capital (Current Assets-Current Liabilities) to run day to day operations.

With rapid corporate growth there can be requirement of cash to invest in ...

Solution Summary

This discusses the impact of cash receipts and disbursements on cash budget