Certified Government Financial Manager (CGFM) 2025 – 400 Free Practice Questions to Pass the Exam

The cash flow budget is specifically designed to track the timing of cash receipts and expenditures within an organization. This type of budget emphasizes when cash will be coming into the organization and when it will need to be paid out, thereby providing insight into potential cash shortfalls or surpluses. It is an essential tool for effective cash management, ensuring that an organization has sufficient liquidity to meet its obligations as they come due.

In contrast, the capital budget focuses on long-term investments and the allocation of funds for significant purchases of fixed assets such as buildings or equipment, without necessarily breaking down cash flow timing. A performance budget, on the other hand, emphasizes the relationship between the funds allocated to a program and the measurable outcomes produced, rather than the cash flow specifics. The operating budget outlines the anticipated revenues and expenses related to day-to-day operations but does not concentrate on the timing of these cash flows. Thus, the cash flow budget stands out for its dedicated focus on the specifics of cash management over a given time period.