Cash Budgetan Imperative Element of Effective Financial Management

Kwame Oduro Amoako, Emmanuel Opoku Marfo, Kelvin Evans Gyau, Felix Oppong Asamoah

Abstract


A firm’s life highly depends on the availability of funds to meet impending obligations as well as efficient employment of excess funds so as to minimize wastages. This paper focuses on cash budgets as a tool that every financial manager should use in ensuring availability as well as effective utilization of cash. Whilst excess liquidity communicates a mangers lack of investment innovativeness, lack of funds to meet short term obligations could also depict a manager’s inability to plan on where and when to get adequate funds for business activities at a lower cost in the short term. Another area of interest in the paper is the role of effective financial management in any organization. Nevertheless, the paper concludes that cash budget preparations enable managers to identify possible future liquidity challenges and at the same time creates a platform for addressing such challenges.


Keywords


Cash budgets; Effective financial management; Liquidity, Cash flow; Receipts; Payments

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References


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DOI: http://dx.doi.org/10.3968%2Fj.css.1923669720130905.2869

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