Business Studies

Business Finance

Easy

What is the purpose of planning a cash budget?

To maintain adequate cash balance for various purposes and to avoid excess balance of cash.

To forecast sales data

To make investments in market: Long term and short term

To maintain adequate workforce in a company ensuring all activities are done in timely manner

✅ Correct Option: 1

A cash budget forecasts cash inflows and outflows so the firm holds enough cash to meet obligations while avoiding idle excess cash. Its purpose is thus to maintain an adequate cash balance and avoid surplus cash, not to forecast sales or manage the workforce.

2025: 21 May Shift 1

Other things remaining the same, an increase in the tax rate on corporate profits will:

2026: 24 May Shift 1

Long term financial planning focuses on which kind of programmes?

2025: 22 May Shift 2

Identify the correct statement.

2022: 15 July Shift 2

Identify one statement among the following that is NOT true about capital budgeting:

2025: 27 May Shift 2

Match List-I with List-II

List-I	List-II
Concept	Meaning
(A) Working Capital	(I) It refers to the mix between owners and borrowed funds for the sources of business finance.
(B) Financial Management	(II) It is essentially preparation of a financial blueprint for an organization's future operations.
(C) Capital Structure	(III) This investment facilitates smooth day-to-day operations of the organization.
(D) Financial Planning	(IV) It is concerned with optimal procurement as well as usage of finance.

Choose the correct answer from the options given below:

2026: 13 May Shift 2

"Even business owners who receive detailed financial statements from their accountants ……………". Complete the statement as per passage.

What is the purpose of planning a cash budget?

Solution

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