CHAPTER 1
THE PROBLEM AND ITS BACKGROUND
Introduction
A budget is an estimation of the revenues and expenses at a given time. It is the amount allocated to certain asset or expense as an exchange for that asset or to the usage that led to that expense. According to an article from entrepreneurship.org, the business planning starts with budgets. Budgeting is not an afterthought. Your budget is a reflection of the goals and strategies you have for each area of business. A one-year budget planning document for the firm that is composed of all other budgets is called a master budget. Usually it is composed of two parts, the operating budget and the financial budget. Under the financial budget is what we call a cash budget.
Cash Budget is the inflows and outflows of cash in a firm. It develops a summary of its operating, investing and financing activities. These activities will help us determine and observe how a firm creates their cash budget.
This research aims to evaluate the cash budgeting process of JTU Marketing Auto Supply and to develop a recommendation, if necessary, for them to improve the said process. Most, if not all, small organizations do not have plans or budgets but still manages to survive and gain profit. This research could help organizations to realize and see that budgets would help them find out some problems in their organization. Also, the research could be used as a basis for an improved study regarding cash budgeting processes in different industries and larger firms since there are few studies than regarding the subject.
Statement of the Problem This research aims to determine the effectiveness and efficiency of the cash budgeting process of JTU Marketing Auto Supply. The research aims to answer the following questions: 1. What is the cash budgeting process of JTU Marketing Auto Supply in terms of the following activities: