BU121 Lecture 10: BU121- Entrepreneurial Finance (Post Midterm)
Document Summary
Cash budgeting: tool to forecast and manage cash flows. Disbursements: cash excess/ deficiency, minimum cash balance desired. A lot of businesses delegate themselves a minimum amount of money they would always like to have in their account. Especially when those businesses don"t have access to a line of credit (which is available right away: borrowing required/ surplus or repayment, ending cash balance. *worksheet based on historical measures of amounts and timing of cash flows/ what is typical in industry. Harder to do for a new business. 6000: 3 possibilities (besides excess = balance required) Deficiency: borrow for deficiency + minimum, ending balance = minimum balance required. Excess > minimum: surplus available to repay borrowing. Excess < minimum: borrow to = minimum required, end balance = minimum required, sales for a new business most likely won"t come in constant each month.
