ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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To determine if available cash and earning will be sufficiently meet expenditures
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To only include resources which will be changed
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To summarize expected income, expense, and profit for enterprise
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To design a general framework for any farmer to evaluate his operation
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Detailed explanation-1: -A company will use a cash budget to determine whether it has sufficient cash to continue operating over the given time frame. A cash budget will also provide a company with insight into its cash needs and any surpluses, which help it determine if the business is using cash effectively.
Detailed explanation-2: -The cash flow budget estimates the future income and expenditure of the business, revealing any periods where it may fall short of cash.
Detailed explanation-3: -The cash flows to total assets ratio shows investors how efficiently the business is at using its assets to collect cash from sales and customers. The higher the ratio, the more efficient the business is.
Detailed explanation-4: -A cash flow statement is a financial statement that shows how much cash enters and leaves your business over a given period of time. It helps you identify profitable parts of the business, spot any areas of waste, and understand when and if it might be the right time to scale.
Detailed explanation-5: -A cash flow budget estimates your business’s cash flow over a specific time period. You can use the information to see if you have enough cash coming in to maintain regular operations over the given timeframe. It can also give insight into how to allocate your budget effectively.