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What are the steps to creating a cash budget?

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What are the steps to creating a cash budget? Which is most difficult? Explain your answer.

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This solution discusses the steps that are involved in creating a cash budget.

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A cash budget is usually prepared after all of the other budgets have been prepared and finalized. This is usually the last budget that the company prepares. To prepare a cash budget, the first number used to start the budget is the beginning cash balance. The inflows of expected cash are then added to the budget, which include both operating and non-operating revenue. The expected outflows are then added next, usually in the same general order that has been used previously in the company's past cash budgets. The beginning cash ...

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