cash budget

noun
Updated on: 13 Oct 2017

Definition of cash budget

:a projection of the future receipts and expenditures of a business

There's more!

Love words? You must — there are over 200,000 words in our free online dictionary, but you are looking for one that’s only in the Merriam-Webster Unabridged Dictionary.

Start your free trial today and get unlimited access to America's largest dictionary, with:

  • More than 250,000 words that aren't in our free dictionary
  • Expanded definitions, etymologies, and usage notes
  • Advanced search features
  • Ad free!
Already a subscriber? Log in.

Financial Definition of CASH BUDGET

cash budget

What It Is

Cash budget is a review or projection of cash inflows and outflows. It can be used as a tool for analyzing the revenues and costs of a company or individual.

How It Works

A cash budget is a planning tool used by companies and individuals to evaluate projected cash flows during a specified period of time (e.g. monthly, quarterly, annually).

For example, if a company's cash budget forecasts itemized inflows (income) of $1,000,000 and itemized cash payments (expenses) of $800,000, management can feel fairly certain that it will have enough cash to pay all of its bills.

Why It Matters

A cash budget allows companies and individuals to evaluate income versus expenses. Managing cash resources is the first step toward growing a company or individual's bottom line. Moreover, lending institutions may use a cash budget to help determine whether or not to grant a loan or extend credit to a company of individual, which makes monitoring cash flow even more important.


Seen and Heard

What made you want to look up cash budget? Please tell us where you read or heard it (including the quote, if possible).

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!

WORD OF THE DAY

marked by intense feeling

Get Word of the Day daily email!

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!