Question

Describe a process of preparing a cash flow budget in 150 - 180 words.

Answer 1

Answer:Steps involved in preparing cash flow budget.

1.Determing the cash inflows of the project ,when will the cash be recieved from the debtors that means what is the aging period of debtors etc

2.determing cash outflows By forecasting your expenses, you could get an estimate of your total outflows for the year. The selling price of your products or services has to include an amount that would cover these expenses, if you want to make profits.

3.overhead expenses these are also known as fixed costs because they do not vary much with the level or volume of sales or they have no correlation to sales

4.Variable expenses these expenses change with the actual sales of the output.

5. In this step we will prepare cash budget by dedicting outflows from the cash inflows determined from the above.

Thanks.....