Cash Budget


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Cash Budget
Cash BudgetA very important concept in the life of a firm is that having profits does not necessarily means that a firm is successful in what it's doing; cash is also extremely important because a firm can be profitable but still run out of cash. A firm receives profits in the future, but needs cash now; this time lag between the moment when a firm receives cash in the future (from profits), and its use of cash now in the present (to pay wages, raw material, components, services ... ) must be correctly managed by the firm. If the firm doesn't have money to pay for raw materials or components to produce its finished goods, the firm cannot manufacture and sell the products, and will not receive profits in the future. Furthermore, if a firm cannot pay wages, bank interests,…
Citation
Gabriele Zini: Green Electrical Energy Storage: Science and Finance for Total Fossil Fuel Substitution. Cash Budget, Chapter (McGraw-Hill Professional, 2016), AccessEngineering Export