Sunday, April 22, 2012

What is the difference between a Cash Budget & Cash Flow Statement?

A cash budget is mainly concerned about the future cash estimation or predicting how much cash will needed in future by a corporation to continue its normal operations.

By contrast, a cash flow statement is focused on cash inflow and outflow of business. Generally in financial accounting, a cash flow statement is only used as a financial statement that shows how changes in balance sheet accounts and income affect current cash and cash equivalents over a specific period of time (usually a year).  It then breaks the cash flow analysis down to categories that include operating expenses, investment decisions, and financing activities.

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