Publish On: 2019-05-11

Jacob sum

Total Post: 464

Question: What does cash outflows include?

Reply On: 2013-06-22


Total Post: 8

ANS: What does cash outflows include?

In the preparation of a cash budget the estimation of cash outflows is very important. Cash outflows include: (i) operating outflows: cash purchases, payments of payables, advances to suppliers,, wages and salaries and other operating expenses, (ii) capital expenditures, (iii) contractual payments: repayment of loan and interest and tax payments; and (iv) discretionary payments: ordinary and preference dividend. In case of credit purchases, a time lag will exist for cash payments. This will depend on the credit terms offered by the suppliers.

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