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How is a cash budget used to help manage current assets?

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Wiki User
2010-05-16 18:55:42

A cash budget helps minimize current assets by providing a

forecast of inflows and outflows of cash. It also encourages the

development of a schedule as to when inventory is produced and

maintained for sales (production schedule), and accounts

receivables are collected. The cash budget allows us to forecast

the level of each current asset and the timing of the buildup and

reduction of each.

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