A minimum cash balance is used by companies to maintain a balance each month/quarter to support acompanys operations. So if the company has sufficient cash generated and covers the minimumbalance, then that means the following month/quarter, only the balance is budgeted for. For exampleIf the cash excess is $15 000, and company needs to maintain $5 000 minimum, and if there is a bankbalance of say $20 ,000, then there is $35,000 in total and meets the minimum of $5 000, therefore thecash balance budgeted for the current month is = $35 000 less $5, 000 = $30 000.But like in M20 company exercise below, there is deficit cash, then you have to consider the cashbalance in the beginning, and the minimum cash that must be maintained in cash budgeting.So in Quarter 1 ( March)- there is a deficit of $17 000, Cash balance of $9 225. Lets examine this .That means for Q1- the cash goes into a deficit again $9225 reduced by $17 000 = ($7775).And the company had to maintain $5 000 . SO for Q1 the final cash balance to be budgeted to alsocover the minimum , we need to add, and our budget for Q1 = (7775) + ($5 000) = ($12 775).Therefore the Q1 shows a deficit of 12 ,775 that will be beginning cash balance for Q2