A service company prepares a cash budget: Sales revenue $300,000, variable costs $150,000, fixed costs $50,000, expected cash collections $280,000.

• Requirements:
  • Prepare a cash budget including cash receipts and cash disbursements.
  • Calculate the ending cash balance for the budget period.
  • Analyze the liquidity position and financing needs based on the cash budget.
  • Recommend strategies to improve cash flow management.
  • Discuss the importance of cash budgeting in financial planning and control.