Financial Budget: Reporter: Katherine Miclat

Financial
Budget
SLIDESMANIA
Reporter: Katherine Miclat

Objectives
01 Financial Budget: Overview
02 Capital Expenditure Budget
03 Cash Budget
04 Illustrative Problems
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01
Financial Budget: Overview
Financial budget preparation includes a detailed budget
balance sheet, cash flow budget, the sources of incomes and
expenses of the business, etc.
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OPERATING BUDGET MASTER BUDGET- GRAPHIC
Direct ILLUSTRATION
Materials
Budget
Direct Labor
Production Budget
Budget
Factory
Overhead
Budget Budget
Selling Budgeted
Sales Budget Cash Statement of
Expense Balance
Budget Changes in
Budget Sheet Financial
Position
Administrative
Expense Budget
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Long Range Capital FINANCIAL BUDGET

Plan Expenditure
Budget
Why is Financial Budget
Prepared?
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Financial
Budget
Importance...
This budget gives the business better

control and provides a more efficient
planning mechanism to manage the inflows
and outflows.
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Capital
Expenditure
Budget
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Capital Expenditures
What is Capital Expenditure Examples
Purchase of asset that is considered a New Facilities

long term investment Renovations
Company Car
Expected to provide returns for Equipment or Machinery
several years. Furniture
Always entail some degree of risk
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Capital Expenditure
Budget
Budget that focuses on the

timing of cash outflows for
capital projects.
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Direct ILLUSTRATION
Materials
Budget
Direct Labor
Production Budget
Budget
Factory
Overhead
Budget Budget
Selling Budgeted
Expense Balance
Budget Changes in
Position
Administrative
Expense Budget
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Plan Expenditure
Budget
Capital
Expenditure
Budget
Importance...
it creates accountability and

measurability.
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Common Format
PROJECT QUARTER AMOUNT

Office Equipment 1 Php 8,000
Delivery Equipment 2 Php 250,000
Manufacturing Equipment 3 Php 120,000
Land 4 Php 160,000
Total Php 538,000

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Common Format
PROJECT Q1 Q2 Q3 Q4 TOTAL
Delivery - Php 50,000 Php 50,000
Vehicles
Construction - Php 100,000 Php 50 000 Php 150,000
Equipment
Total Capital Php 50,000 Php 100,000 Php 50,000 Php 200,000
Expenditure
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Capital Expenditure
Budget
Assume that Hotdog Manufacturing Co. plans
to acquire the following:
●January 2021- 10 units of equipment at a
total cost of Php 5,500 each.
●April 2021- 2 unit of delivery vehicle total
worth Php 450,000
●September 2021- Warehouse renovation
worth Php 225,000
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●December 2021- Land worth Php 674,000

Capital Expenditure Budget for Hotdog Manufacturing Co,
Hotdog Manufacturing Co.

Capital Expenditure Budget
For The Year Ended December 31, 2021
PROJECT QUARTER AMOUNT

Manufacturing Equipment 1 Php 55,000
Delivery Equipment 2 Php 450,000
Warehouse Renovation 3 Php 225,000
Land 4 Php 674,000

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Total Php 1,404,000

Budget
Cash
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Cash Budget
● A cash budget is a company's estimation

of cash inflows and outflows over a
specific period of time, which can be
weekly, monthly, quarterly, or annually.
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Direct ILLUSTRATION
Materials
Budget
Direct Labor
Production Budget
Budget
Factory
Overhead
Budget Budget
Selling Budgeted
Expense Balance
Budget Changes in
Position
Administrative
Expense Budget
SLIDESMANIA

Plan Expenditure
Budget
Cash Budget is a
vital part of the
financial budget
WHY?
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example
Swimming Pool Low Proft

Seasonality
Resort
You own an incredible
Business is slow due to There will be little to no cash
resort with amazing slides
Back to School Season or coming yet you have
and great facilities
during Rainy Season. foregoing expenses such as
maintenance, salary and etc.
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Therefore, cash
budget is
necessary...
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Basic
Format
Cash Budget Basic Format
Expected Cash Balance, xx
Beginning
Add: Budgeted Cash Receipts xx
Total Cash Available xx
Less: Budgeted Cash xx
Disbursements
Ending Cash Balance xx
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BUDGETED CASH RECEIPT; BUDGETED CASH DISBURSEMENT:
What Do We Expect to What Do We Plan to Pay

Collect? For?
• Cash Purchases of Materials

• Cash Sales
• Other Manufacturing Costs
• Collection of Accounts
• Payment of Accounts Payable
Receivables
• Operating Expense
• Loan Proceeds
• Payment of Loans
• Additional Investment of
• Dividend Withdrawals by
Owners/Stockholders
• Sale of Company’s Asset other Owners
• Acquisition of Assets other than
than Merchandise
• Donations Merchandise
• Donations
• Interest or Dividends on
• Interest on Loans
Investment
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When Do We Expect to Collect the When Do We Expect to Pay the

Above Items? Above Items?
Let’s Have an Illustrative
Example-Process
Detailed
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1. Budgeted Cash Receipt
Illustrative Example
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What you need... Xxx Manufacturers Xxx Manufacturers
Direct Labor Budget
Raw Materials Purchases Budget
For the Year Ended December 31, 2021 For the Year Ended December 31, 2021
Xxx Manufacturers
Budgeted Income Statement
For the Year Ended December 31, 2021
Xxx Manufacturers
Xxx Manufacturers
Factory Overhead Cost Budget
Xxx Manufacturers
Xxx Manufacturers Operating Expense Budget
Sales Budget For the Year Ended December 31, 2021
SLIDESMANIA
Illustrative Example: Budgeted Cash Receipt
Uno Manufacturers Inc. Is about to develop Cash Receipt Budget with the help of the company’s
information about their sales and collection patterns.
UnoManufacturers Inc.
Sales Budget
Units Pesos
First Quarter 3,300 247,500
Second Quarter 4,000 300,000
Third Quarter 5,000 375,000
Fourth Quarter 2,750 206,250
Year Total 15,050 1,128,750
Additional Information:
• Company plans to sell their equipment of Php 50,000 at second quarter.
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• Company assumes the total sales each quarter is 40% cash, balance is on account.
• Half of the sales on account during the quarter is collected in the same quarter, balance is
collected in the following quarter
Illustrative Example: Budget Cash Receipt
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Total
Cash Sales
Collection of Accounts Receivables
Current Quarter Sales

Previous Quarter Sales
Proceeds from sale of Equipment
TOTAL BUDGETED CASH
RECEIPTS
Solution
Sales Budget Cash Sales
First Quarter 247,500 X40% 99,000 • Company assumes the total sales each
Second Quarter 300,000 X40% 120,000 quarter is 40% cash, balance is on
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Third Quarter 375,000 X40% 150,000

account.
Fourth Quarter 206,250 X40% 82,500
Cash Sales 99,000 120,000 150,000 82,500 451,500

TOTAL BUDGETED CASH
RECEIPTS
Solution
Sales Budget Cash Sales
First Quarter 247,500 X40% 99,000 • Company assumes the total sales each
Second Quarter 300,000 X40% 120,000 quarter is 40% cash, balance is on
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Third Quarter 375,000 X40% 150,000

account.
Fourth Quarter 206,250 X40% 82,500
Cash Sales 99,000 120,000 150,000 82,500 451,500

TOTAL BUDGETED CASH RECEIPTS
Solution
Sales Cash Accounts Current Quarter Previous

Budget Sales Receivables Cash Sales Quarter Cash • Half of the sales on
(50%) Sales (50%)
account during the
First Quarter 247,500 X40% 99,000 148,500 74,250 74,250
quarter is collected in
Second Quarter 300,000 X40% 120,000 180,000 90,000 90,000
the same quarter,
balance is collected
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Third Quarter 375,000 X40% 150,000 225,000 112,500 112,500
Fourth Quarter 206,250 X40% 82,500 123,750 61,875 61,875

in the following
quarter
Cash Sales 99,000 120,000 150,000 82,500 451,500
Current Quarter Sales 74,250 90,000 112,500 61,875 338,625

Solution

(50%) Sales (50%)
account during the
First Quarter 247,500 X40% 99,000 148,500 74,250 74,250
Second Quarter 300,000 X40% 120,000 180,000 90,000 90,000
the same quarter,
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Third Quarter 375,000 X40% 150,000 225,000 112,500 112,500
Fourth Quarter 206,250 X40% 82,500 123,750 61,875 61,875

in the following
quarter
Cash Sales 99,000 120,000 150,000 82,500 451,500

Previous Quarter Sales 40,000* 74,250 90,000 112,500 316,750
Solution
*Assumed Figure
(50%) Sales (50%)
account during the
First Quarter 247,500 X40% 99,000 148,500 74,250 74,250
Second Quarter 300,000 X40% 120,000 180,000 90,000 90,000
the same quarter,
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Third Quarter 375,000 X40% 150,000 225,000 112,500 112,500
Fourth Quarter 206,250 X40% 82,500 123,750 61,875 61,875

in the following
quarter
Cash Sales 99,000 120,000 150,000 82,500 451,500

Solution

Budget Sales Receivables Cash Sales Quarter Cash • Company plans to
(50%) Sales (50%)
First Quarter 247,500 X40% 99,000 148,500 74,250 74,250 sell their
Second Quarter 300,000 X40% 120,000 180,000 90,000 90,000
equipment of Php
50,000 at second
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Third Quarter 375,000 X40% 150,000 225,000 112,500 112,500

quarter.
Fourth Quarter 206,250 X40% 82,500 123,750 61,875 61,875
Cash Sales 99,000 120,000 150,000 82,500 451,500

Proceeds from sale of Equipment - 50,000 - - 50,000
Solution

Budget Sales Receivables Cash Sales Quarter Cash • Company plans to
(50%) Sales (50%)
First Quarter 247,500 X40% 99,000 148,500 74,250 74,250 sell their
Second Quarter 300,000 X40% 120,000 180,000 90,000 90,000
equipment of Php
50,000 at second
SLIDESMANIA
Third Quarter 375,000 X40% 150,000 225,000 112,500 112,500

quarter.
Fourth Quarter 206,250 X40% 82,500 123,750 61,875 61,875
Cash Sales 99,000 120,000 150,000 82,500 451,500

Proceeds from sale of Equipment - 50,000 - - 50,000
TOTAL BUDGETED CASH 213,250 334,250 352,500 256,875 1,156,875
RECEIPTS
Solution\
Sales Budget Cash Sales Accounts Receivables Quarter Cash Quarter Cash Sales
Sales (50%) (50%)
First Quarter 247,500 X40% 99,000 148,500 74,250 74,250
Second Quarter 300,000 X40% 120,000 180,000 90,000 90,000

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Third Quarter 375,000 X40% 150,000 225,000 112,500 112,500
Fourth Quarter 206,250 X40% 82,500 123,750 61,875 61,875

2. Budgeted Cash
Disbursement
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What you need... Xxx Manufacturers Xxx Manufacturers
Direct Labor Budget
Raw Materials Purchases Budget
For the Year Ended December 31, 2021 For the Year Ended December 31, 2021
Xxx Manufacturers
Budgeted Income Statement
Xxx Manufacturers
Xxx Manufacturers
Factory Overhead Cost Budget
Xxx Manufacturers
Xxx Manufacturers Operating Expense Budget
Sales Budget For the Year Ended December 31, 2021
SLIDESMANIA
Illustrative Example: Budgeted Cash Disbursement
Uno Manufacturers Inc. Is about to develop Cash Disbursement Budget with the help of the
company’s other budgetary reports.
Budgeted Raw Budgeted Direct Budgeted Factory Budgeted Budgeted Capital
Materials Purchase Labor Cost Overhead Cost OPEX Expenditure
First Quarter 16,500 49,500 18,000 33,000 5,000 (equipment)
Second Quarter 20,000 60,000 22,000 40,000 -
Third Quarter 25,000 75,000 23,000 50,000 -
Fourth Quarter 13,750 41,250 16,250 27,500 2,500 (renovation)
Year Total 75,250 225,750 79,250 150,500 7,500
Additional Information:
• Purchases of materials are assumed to be 20% cash, balance is purchases on account
• 40% purchase on account per quarter is paid while the balance 60% is paid in the following
quarter.
• Direct Labor, Factory Overhead and OPEX are assumed to be paid in the same quarter they
incur.
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• OPEX has Php 5,000 fixed depreciation expense per quarter.

Illustrative Example: Budget Cash Disbursements
Cash Purchases of Materials
Payment of Accounts Payable:
Current Quarter Purchases
Previous Quarter Purchases
Direct Labor
Solution
Budgeted
Factory Overhead Cash Purchases Current Previous
Raw Purchase on Account Quarter Quarter • Purchases of materials are
Materials of Mats Purchase Purchase (60%)
OPEX (40%) assumed to be 20% cash,
Purchase
balance is purchases on
FirstCapital
QuarterExpenditure:
16,500 X20% 3,300 13,200 5,280 7,920
Second 20,000 X20% 4,000 16,000 6,400 9,600 account
QuarterEquipment • 40% purchase on account
Third Quarter 25,000 X20% 5,000 20,000 8,000 12,000 per quarter is paid while
Renovation
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Fourth 13,750 X20% 2,750 11,000 4,400 6,600

the balance 60% is paid in
Quarter
TOTAL BUDGETED CASH
DISBURSEMENTS the following quarter.
Cash Purchases of Materials 3,300 4,000 5,000 2,750 15,050
Current Quarter Purchases 5,280 6,400 8,000 4,400 24,080
Previous Quarter Purchases 2,000* 7,920 9,600 12,000 31,520
Direct Labor
Solution
Budgeted
Factory Overhead Cash Purchases Current Previous
Raw Purchase on Account Quarter Quarter • Purchases of materials are
Materials of Mats Purchase Purchase (60%)
OPEX (40%) assumed to be 20% cash,
Purchase
balance is purchases on
FirstCapital
QuarterExpenditure:
16,500 X20% 3,300 13,200 5,280 7,920
Second 20,000 X20% 4,000 16,000 6,400 9,600 account
QuarterEquipment • 40% purchase on account
Third Quarter 25,000 X20% 5,000 20,000 8,000 12,000 per quarter is paid while
Renovation
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Fourth 13,750 X20% 2,750 11,000 4,400 6,600

the balance 60% is paid in
Quarter
TOTAL BUDGETED CASH
DISBURSEMENTS the following quarter.
Direct Labor
Factory Overhead
OPEX
Capital Expenditure:
• Direct Labor, Factory Overhead and OPEX are
Equipment
assumed to be paid in the same quarter they incur.
Renovation • OPEX has Php 5,000 fixed depreciation expense per
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TOTAL BUDGETED CASH quarter..

DISBURSEMENTS
Budgeted Raw Budgeted Direct Budgeted Factory Budgeted Budgeted Capital
Materials Purchase Quarter 1
Labor Cost Quarter 2 Quarter
Overhead Cost 3
OPEX Quarter 4 Year Total
Expenditure
First Cash
Quarter
Purchases16,500
of Materials 49,500
3,300 4,00018,000 5,000 33,000 2,750 5,000 (equipment)
15,050
Second Quarter 20,000 60,000 22,000 40,000 -
ThirdPayment
Quarter of Accounts Payable:
25,000 75,000 23,000 50,000 -
Fourth Current
Quarter Quarter
13,750
Purchases 41,250
5,280 6,40016,250 8,000 27,500 4,400 2,500 (renovation)
24,080
Year Total 75,250 225,750 79,250 150,500 7,500
Direct Labor 49,500 60,000 75,000 41,250 225,750
Factory Overhead 18,000 22,000 23,000 16,250 79,250
OPEX
Equipment
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DISBURSEMENTS
Cash Purchases of Materials OPEX

3,300 Depreciation
4,000 OPEC to be paid
5,000 and
2,750 15,050
Expense incurred
First Quarter
Payment of Accounts Payable: 33,000 5,000 28,000
Second Quarter 40,000 5,000 35,000
Third Quarter 50,000 5,000 45,000
Fourth Purchases
Previous Quarter Quarter 27,500
2,000* 5,000 7,920 22,500
9,600 12,000 31,520
Year Total 150,500 130,500
Direct Labor 49,500 60,000 75,000 41,250 225,750
OPEX 28,000 35,000 45,000 22,500 130,500
Equipment
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DISBURSEMENTS
Budgeted Raw Quarter 1Budgeted Quarter Budgeted
2 Factory
Quarter 3 OPEXQuarter 4Capital Expenditure
Year Total
Materials Purchase Direct Labor Overhead Cost
Cash Purchases of Materials 3,300 Cost 4,000 5,000 2,750 15,050
First Quarter 16,500 49,500 18,000 33,000 5,000 (equipment)
Second Quarter 20,000 60,000 22,000 40,000 -
Current
Third Quarter Purchases
Quarter 25,000 5,280 75,000 6,400 23,000 8,000 50,0004,400 - 24,080
Fourth Quarter
Previous 13,750
Quarter Purchases 2,000* 41,250 7,920 16,250 9,600 27,50012,000 2,500 (renovation)
31,520
Year Total 75,250 225,750 79,250 150,500 7,500
Direct Labor 49,500 60,000 75,000 41,250 225,750
OPEX 28,000 35,000 45,000 22,500 130,500
Equipment 5,000 5,000
Renovation 2,500 2,500

SLIDESMANIA
TOTAL BUDGETED CASH

DISBURSEMENTS
Direct Labor 49,500 60,000 75,000 41,250 225,750
OPEX 28,000 35,000 45,000 22,500 130,500
Equipment 5,000 5,000
Renovation 2,500 2,500

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TOTAL BUDGETED CASH 111,080 135,320 165,600 101,650 513,650

DISBURSEMENTS
3. Cash Budget
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Basic
Format
Beginning
Disbursements
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Illustrative Example: CASH BUDGET

Cash Balance, 71,500*
Beginning
Add: Budgeted
Cash Receipts
Total Cash
Available
Less: Budgeted
Cash Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Total
Disbursements
Ending Cash
TOTAL BUDGETED CASH
Balance 111,080 135,320 165,600 101,650 513,650
DISBURSEMENTS
TOTAL BUDGETED CASH 213,250 334,250 352,500 256,875 1,156,875

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RECEIPTS
Quarter Quarter 2 Quarter 3 Quarter 4 Year Total

1
Cash Balance, 71,500
Beginning
Add: Budgeted 213,250 334,250 352,500 256,875 1,156,875
Cash Receipts
Total Cash
Available
Less: Budgeted 111,080 135,320 165,600 101,650 513,650
Cash
Disbursements
Ending Cash
Balance
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Uno Manufacturers
Cash Budget
Quarter Quarter 2 Quarter 3 Quarter 4 Year Total

1
Cash Balance, 71,500 173,670 372,600 559,500 71,500
Beginning
Add: Budgeted 213,250 334,250 352,500 256,875 1,156,875
Cash Receipts
Total Cash 284,750 507,920 725,100 816,375 1,228,375
Available
Less: Budgeted 111,080 135,320 165,600 101,650 513,650
Cash
Disbursements
Ending Cash 173,670 372,600 559,500 714,725 714,725
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Balance
Example
Simple-Walkthrough
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Illustrative Example:
Cash , Beginning Balance 2,500 2,000 42,500 68,500 2,500
Add: Cash Receipt 15,000 90,000 60,000 30,000 19,500
Cash Available 17,500 92,000 102,500 98,500 197,500
Less; Cash Disbursement
Direct Materials 3,000 18,000 12,000 6,000 39,000
Direct Labor 4,000 12,000 8,000 6,000 30,000
Factory Over Head 2,000 6,000 4,000 3,000 15,000
SG and A Expense 10,000 10,000 10,000 10,000 40,000
Total Disbursement 19,000 46,000 34,000 25,000 124,000
Excess/Shortage (1,500) 46,000 68,500 73,500 73,500
Borrowings 3,500 - - - 3,500
Repayments - (3,500) - - (3,500)
Interest Expense - - - - -
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Cash, Ending Balance 2,000 42,500 68,500 73,500 73,500

Problem
Simple
SLIDESMANIA
Uno Cutie Company is preparing its cash budget for the coming
month. All sales are made on account. Given the following:
Beginning Balances Budgeted Amounts
Cash Php 220,000

Accounts Receivables Php 88,000
Sales Php 435,000
Cash Disbursement Php 245,000
Depreciation Php 71,000
Ending Accounts Receivables Php 340,000
Balance
What is the expected cash balance of the company at the end of the coming month?
SLIDESMANIA
Basic
Format
Beginning
Disbursements
SLIDESMANIA
What is the expected cash balance of the company at the end of the coming month?
ANSWER: cash balance at the end of the period is equal to the: Beginning Cash
balance + Sales - Ending AR + Beginning AR - Cash Disbursements
Php 220,000 + Php 435,000 - Php 340,000 + $88,000 – Php 245,000

= Php 158,000.
Cash, Beginning Balance Php 220,000

Budgeted Cash Receipt:
Sales Php 435,000
Beginning AR Php 88,000
Less: Ending, AR Php 340,000 Php 183,000
Less; Cash Disbursement Php 245,000
Cash, Ending Balance Php 158,000
SLIDESMANIA
thank you!
Do you have any questions?
Katherine Miclat
555-111-222
kajomiclat@gmail.com
SLIDESMANIA

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Financial

Reporter: Katherine Miclat

01 Financial Budget: Overview

02 Capital Expenditure Budget

Long Range Capital FINANCIAL BUDGET

This budget gives the business better

What is Capital Expenditure Examples

Purchase of asset that is considered a New Facilities

Budget that focuses on the

Long Range Capital FINANCIAL BUDGET

it creates accountability and

PROJECT QUARTER AMOUNT

Manufacturing Equipment 3 Php 120,000

Land 4 Php 160,000

Total Php 538,000

●December 2021- Land worth Php 674,000

Hotdog Manufacturing Co.

PROJECT QUARTER AMOUNT

Delivery Equipment 2 Php 450,000

Warehouse Renovation 3 Php 225,000

Land 4 Php 674,000

Total Php 1,404,000

● A cash budget is a company's estimation

Long Range Capital FINANCIAL BUDGET

Swimming Pool Low Proft

What Do We Expect to What Do We Plan to Pay

• Cash Purchases of Materials

When Do We Expect to Collect the When Do We Expect to Pay the

Current Quarter Sales

Third Quarter 375,000 X40% 150,000

Current Quarter Sales

Third Quarter 375,000 X40% 150,000

Current Quarter Sales

Sales Cash Accounts Current Quarter Previous

Third Quarter 375,000 X40% 150,000 225,000 112,500 112,500

Fourth Quarter 206,250 X40% 82,500 123,750 61,875 61,875

Current Quarter Sales 74,250 90,000 112,500 61,875 338,625

Sales Cash Accounts Current Quarter Previous

Third Quarter 375,000 X40% 150,000 225,000 112,500 112,500

Fourth Quarter 206,250 X40% 82,500 123,750 61,875 61,875

Current Quarter Sales 74,250 90,000 112,500 61,875 338,625

Third Quarter 375,000 X40% 150,000 225,000 112,500 112,500

Fourth Quarter 206,250 X40% 82,500 123,750 61,875 61,875

Current Quarter Sales 74,250 90,000 112,500 61,875 338,625

Sales Cash Accounts Current Quarter Previous

Third Quarter 375,000 X40% 150,000 225,000 112,500 112,500

Current Quarter Sales 74,250 90,000 112,500 61,875 338,625

Sales Cash Accounts Current Quarter Previous

Third Quarter 375,000 X40% 150,000 225,000 112,500 112,500

Current Quarter Sales 74,250 90,000 112,500 61,875 338,625

Second Quarter 300,000 X40% 120,000 180,000 90,000 90,000

Third Quarter 375,000 X40% 150,000 225,000 112,500 112,500

Fourth Quarter 206,250 X40% 82,500 123,750 61,875 61,875

• OPEX has Php 5,000 fixed depreciation expense per quarter.

Cash Purchases of Materials

Payment of Accounts Payable:

Current Quarter Purchases

Previous Quarter Purchases

Fourth 13,750 X20% 2,750 11,000 4,400 6,600