Cash Flow Budget Department of Economics：现金流量预算经济系

1、cash flow budgeting: chap.13 what is a cash flow budget used for? what items are included in cash inflows and cash outflows? what adjustments can be made to project a positive cash balance?uses for a cash flow budget1. project credit requirements and repayment plan2. plan marketing patterns3. commun

2、icate these plans to a lender4. useful for monitoring actual cash flows throughout the yearcash flow budgets do not project profits or net farm income. cash inflows1. sales and other cash income2. new loans received3. sales of capital assets4. nonfarm income5. beginning cash on handcash outflows1. c

3、ash expenses2. principal payments3. purchase of capital assets4. nonfarm expenses5. ending cash on handdo not include:depreciationopportunity costsany other noncash income or expensescash flow budgets can be:annualquarterlybi-monthlymonthly1.estimate cash inflows and outflows for the entire year fir

4、st.2.distribute the annual totals among the periods within the year.allocate annual expenseswholeyearjan-marchapril-junejuly-sept.oct.-decseed$25,000$6,000$12,000$7,000fuel$28,000$2,000$10,000$4,000 $12,000budget within the yearjan-febmar-aprmay-junejuly-augsep-octnov-deccashinflows- cash outflows=

5、cashbalanceobjective: budget for a positive cash balance at the end of each period may plan for a minimum balance, such as $1,000 balance the budget for the whole year first, then for each period within the year.annual adjustments to cash flow sell more crops and livestock at end(but less will be av

6、ailable next year) use loan funds to purchase capital assets postpone purchase of capital assets sell capital assetsannual adjustments to cash flow postpone repayment of short-term loans (but more will be due next year) lengthen the repayment period for term loans reduce nonfarm expenditures increas

7、e nonfarm incomeseasonal adjustmentsshift timing of crop and livestock salesshift timing of cash expenses (including loan payment dates)use short-term creditprofit and cash flow in the short run we want to have enough cash to meet all obligations on time. in the long run we want to earn enough to pa

8、y all costs including a return to our own labor and investment.comparison of whole farm budget and cash flow budgetwhole farm gross revenue sales of grain, livestock, products other income (usda payments, etc.)cash flowcash inflows sales of grain, livestock, products other income (usda payments, etc.)new loans receivedsales of capital assetsnonfarm incomecash on handcomparison of whole farm budget and cash flow budgetwhole farm costs cash variable costs cash fixed costsdepreciation= net farm income- opportunity costs= profit & re