Financial Management: Cash Budget and Profit Budget Forecast

Financial Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
Cash Budget for period: January 2020 to June 2020:..................................................................4
TASK 2............................................................................................................................................5
Profit budget forecast as at the 30th of June 2020 (for the period January 2020 to June 2020). 5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Financial management relates to approach of efficiently managing funds/resources,
whether that is a organization or individual. It has various effects for individuals and businesses.
This is intended for efficient acquisition and allocation of resources for organizations. At the
other side, this is intended to handle the income for individuals to have a strong financial
performance and potential sustainability. In the corporate world, the term 'Financial
management' is mixture of 2 critical terms. 'Financing' and 'management' 'Financing' implies
funds and thus financial management applies to fund administration. This is the most efficient
way of scheduling, collecting, and spending funds (Shapiro and Hanouna, 2019). Basically,
financial management approach is nothing more than managing expenditures and revenue to
achieve economic stability. Economic security means that money is available at time
of requirement. This is a crucial problem for many organizations to tackle. Entities that include
companies (for fund procurement and investment), individuals (for projected expenses and
income procurement), governments (for the most effective use of taxpayer's funds), non-profit
organisations (for allocation of funds needed for operations to be carried out) etc.
In this regard this report is focused on case study of Westhorpe Leisure Investments
Limited which owns medium-size hotels(four stars) in South-east England and Wales. The report
consists of preparation of cash budget based on information provided in case study. Further this
report also contains a profit budget forecast of company for period Jan 2020 to June 2020.
MAIN BODY
TASK 1
Cash Budget: A cash budget is form of budget designed for forecasting cash inflows as well as
outflows for a given time-period. This budget demonstrates the planned cash-inflows
and outflows in the coming years. The aim of framing a cash budget is just to assess if the
company's cash flow is adequate to accomplish/meet its shorter-term funding requirements or
when excessive cash is held inactive and unconstructive in the organisation (Chandra, 2020).
Therefore, it allows the managers to assess funds surplus and deficit, so that necessary measures
could be made.