Cash budget and target cash balance The target cash balance is defined as the ideal cash amount a company intends to hold in its reserve at a given time. This figure seeks to strike a balance between the balance sheet costs of extremely little and too much cash. While a company with surplus cash at hand may misuse on investment opportunities, a company with poor cash will often be forced

Operating expenses include selling and administrative expense. Ordinarily, a forecast or budget for selling expenses is prepared together with the sales budget or profit target because selling efforts such as promotions, commissions and salaries of the sales staff are directly related to sales. Selling expenses may either be variable or fixed. Administrative expenses include projected administrative costs for other than production or selling activities. These expenses are mostly composed of

Looking over a spreadsheet can clarify when to make larger purchases, such as waiting until the start of a new billing cycle, or negotiating better payment terms offered by suppliers and any creditors, especially when interest rates are volatile. Once the need for a budget is established then the organization can consider what type of budget it desires. For example, with zero-based budgeting, "all expenses must be justified for each

After considering the material provided by both the FSO Technologies and Bank of America tutorials, it becomes increasingly clear that the key to long term financial viability is projection and planning. In the case of the childcare center, the tutorial advised that once one has clearly mapped out a cash budget which compares expected cash inflows and outflows, one can begin to make meaningful incremental and longterm changes in spending and pricing. As the childcare center

Budgeting The relevance of budgets when it comes to the management of organizational operations cannot be overstated. In this text, I discuss the various types of budgets. In so doing, I will make use of a hypothetical company by the name ABC Industries -- a Texas-based manufacturing entity. ABC produces blankets. Types of Budgets Budgets can be classified in numerous ways. The classification approach I adopt in this case is largely founded on

Budgeting is not only useful for a business organization but it is also useful for personal planning and spending. The existence of a well structured budget within an organization or a personal budget tells how well a person or the business is organized. From a business perspective regardless of the type and size a budget is an important recipe for success and smooth running of the business. According to Burrows and