This budget consists of: :
- Income streams (previously developed a program of net collections)
- Outflow (expenses and disbursements of net payments program)
- Initial cash balance (the amount in cash at beginning of period)
- Funding (if required to achieve the desired ending balance)
- Ending Cash Balance (the amount in cash at the end of period)
- Flows from operating activities (related to business operations that are repetitive are called normal flow)
- Flows from investing activities (related to the investment budget, usually movement of money to acquire assets and financing)
Flows from financing activities (obtaining money via internal or external funding, and performance pay creditors - investors, they are called abnormal flows, as in investing activities).
To prepare the cash flow may follow two methods:
- Direct methods is to detect and structure of every physical inflows and outflows of money projected for the year.
- See a indirect method of the resulting net income in the Profit and Loss, and that value is corrected accounting movements that do not generate actual movement of cash (receipts and deferred payments, depreciation, amortization of intangibles, gains or losses from sale of assets)
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