FIN 370 Week 2 DQ 2

FIN 370 Week 2 DQ 2 - Discussion Question(s) #2 Please...

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Discussion Question(s) #2 Please reply to this thread by or before Friday, day 4 with your answers! What information is needed to prepare a cash budget? What is the relationship between an operating and a cash budget? Why is it important for an organization to prepare a cash budget? What information is needed to prepare a cash budget? A cash budget reflects the flow of cash over a period of time, both into and out of an organization and reflects working capital and the ability of an organization to meet short-term funding needs. To prepare a cash budget, an organization needs to know its starting cash balance, its expected sales, collected accounts receivables, disbursed accounts payables, cash payments on contractual obligations, and all other cash expenses such as payroll, administrative, sales, plant and equipment expenses, et cetera. The cash budget will reveal the net effect of the periodic flow of cash on its cash balance, revealing the expected ending cash balance. What is the relationship between an operating and a cash budget?
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This note was uploaded on 02/21/2011 for the course FIN 370 taught by Professor Unknown during the Spring '08 term at University of Phoenix.

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