Cash budget is the budgeted and anticipated cash flows which are used internally used for

management. It is located in the financial budget of a master budget. Cash flow statement is
directed towards the external users mainly and it shows the actual sources and uses of cash
from operating, investing and financing activities.

Differences between cash budget and cash flow statement

1. Cash budget is futuristic in approach, prepared on the basis of future plan of action in
advance. Cash flow statement is prepared on the basis of past data.
2. Cash budget relates with the objectives that are to be achieved & is a plan for inflows
of cash & outflows of cash. Whereas, cash flow statement does a post mortem
analysis of actual inflows of cash & outflows of cash.

Similarities between cash budget and cash flow statement

1. As a financial management and control tool, cash budget enables you to quickly see
overages and excessive expenditures. This insight allows you to take actions to
reduce spending or reallocate resources. In a similar way, the cash flow statement
enables you to see where and why your cash is low or high, so that you can make the
necessary adjustments.
2. Both of them are used to record the cash inflows and cash outflows.