operating profit) are not required. Note: Templates are provided (Refer to Appendix 8). 4.4 Cash budgets The purpose of a cash Prepare a cash budget: Draw conclusions from a budget and its role in – solve cash budget in terms of its simple cash control problems with all components and the Advantages data and expected (future) cash Main sources of information position of the business finance provided. Data and Make recommendations to further equity information is business owners and bank overdrafts straightforward managers about loans – solve improving the cash complex mortgages problems requiring position of the business. Main considerations significant when borrowing manipulation of finance: data such as risk - credit history, collections from employment history, accounts receivable collateral, and items which guarantors, require an liquidity understanding of the return - interest rates and future interrelationship of business. data, e.g. depreciation, discount expense and bad and doubtful debts Note: Templates are provided (Refer to Appendices 9.A and 9.B). 5: (15
operating profit) are not required. Note: Templates are provided (Refer to Appendix 8). 4.4 Cash budgets The purpose of a cash budget and its role in cash control Advantages Main sources of finance further equity bank overdrafts loans mortgages Main considerations when borrowing finance: risk - credit history, employment history, collateral, guarantors, liquidity return - interest rates and future business. Prepare a cash budget: simple – solve problems with all data and information provided. Data and information is straightforward complex – solve problems requiring significant manipulation of data such as collections from accounts receivable and items which require an understanding of the interrelationship of data, e.g. depreciation, discount expense and bad and doubtful debts Note: Templates are provided (Refer to Appendices 9.A and 9.B). Draw conclusions from a cash budget in terms of its components and the expected (future) cash position of the business Make recommendations to business owners and managers about improving the cash position of the business. 5: (15
ACC315116_course_v1b.docx