All 34 Cash Budgeting questions
More in Cash Budgeting
How do you calculate cash receipts from credit sales? How do you calculate cash payments to suppliers? How is a cash budget structured/formatted? What actions can management take if the cash budget shows a shortfall? How does the cash budget link to working capital management? How do capital expenditure and financing appear in the cash budget? How do bad debts affect cash receipts in the cash budget? How are settlement discounts reflected in the cash budget? How does a cash budget help decide on financing arrangements? How do tax and dividend payments feature in the cash budget?
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Budgeting & Forecasting › Cash Budgeting

What can management do with a forecast cash surplus?

Intermediate

Answer

A surplus can be invested short-term (deposits, money-market instruments) for a return, used to repay debt early, fund capital projects, pay down payables to capture discounts, return cash to owners (dividends/buybacks), or held as a buffer. The cash budget helps deploy idle cash productively rather than leaving it unremunerated.
Real-world example A projected surplus is placed on a short-term deposit to earn interest until needed.

Common follow-ups: Why not leave surplus cash idle? | What are the options for a surplus?

Rolling Forecasts Capital Budgeting Cash Budgeting
All 34 Cash Budgeting questions