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Cash Budget Format

Find out more about cash budget format.

In this article, you will learn more about cash budget format.

Cash Budget Format

The cash budget is divided into four sections:

  1. Cash receipts: lists all cash inflows excluding cash received from financing
  2. Cash disbursements: consists of all cash payments excluding repayments of principal and interest
  3. Cash excess or deficiency: determines if the company will need to borrow money or if it will be able to repay funds previously borrowed
  4. Financing: details the borrowings and repayments projected to take place during the budget period.

The Cash Budget

Assume the following information for Royal:

  • Maintains a 16% open line of credit for $75,000.
  • Maintains a minimum cash balance of $30,000.
  • Borrows on the first day of the month and repays loans on the last day of the month.
  • Pays a cash dividend of $49,000 in April.
  • Purchases $143,700 of equipment in May and $48,300 in June (both paid in cash).
  • Has an April 1st cash balance of $40,000.


Beginning cash balance: April $40k, May $30k, June $30k, Q $40k. Add: Cash collections: April 170k, May 400k, June 335k, Q 905k. Total cash available: April 210k, May 430k, June 365k, Q 945k. Less: Cash disbursements: Materials: April 40k, May 72.3k, June 72.7k, Q 185k. Direct labour: April 15k, May 23k, June 15k, Q53k. Manufacturing overhead: April 56k, May 76k, June 59k, Q 191k. Selling and admin: April: 70k, May 85k, June 75k, Q 230k. Equipment purchase: April 0, May 143.7k, June 48.3k, Q 192k. Dividend: April 49k, May 0, June 0, Q 49k. Total disbursements: April 230k, May 400k, June 270k, Q 900k. Excess (deficiency): April (20k), May 30k, June 95k, Q 45k. Financing: Borrowing: April 50k, May 0, June 0, Q 50k. Repayments: April 0, May 0, June (50k), Q (50k). Interests: April 0, May 0, June (2k), Q (2k). Total financing: April 50k, May 0, June (52k), Q (2k). Ending cash balance: April $30k, May $30k, June $43k, Q $43k

Over to you

Please take some time to review this exercise and when you are ready move on to the next step, where you will find a short quiz.

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