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Cash budget as a planning tool towards projects completion by construction firms in the Northern suburbs industrial areas of Cape Town
Author(s)
Mdongwana, Vuyowlethu
Date Issued
2020
Type
Thesis
Publisher
Cape Peninsula University of Technology
Abstract
This study sought to ascertain the extent to which construction firms in the Cape Town
Northern Suburb industrial areas use cash budgets when planning their project completion.
More precisely, the study aimed to determine the types of budgets used by construction
firms, the purpose for which types of budgets are used by construction firms, the perception
of the construction firm regarding the awareness and usage of these types of budgets, and
whether these types of budgets are outsourced or internally prepared. The study was
motivated by a dearth of research on the usage of cash budgets by construction firms, the
high rate of failure of South African construction firms and the poor performance, which then
reflects high levels of non-completion and low productivity on projects. Data was collected by
means of a questionnaire survey that consisted of closed-ended questions.
The findings of the study reveal that most of the sampled construction firms frequently
prepare and use budgeted income statements and cash budgets. Furthermore, the findings
also suggest that the sampled construction firms used different types of budgets, mostly for
the purposes of allocating resources and forecasting the cost fluctuation on their businesses.
Concerning the perception and the awareness of the types of budgets, the findings revealed
that the investigated construction firms were perceived to be mostly aware of budgeted
income statements and cash budgets.
Regarding the preparation and outsourcing of cash budgets, the findings indicate that cash
budgets were mostly prepared on a monthly and yearly basis. In addition, the results also
suggest that most construction firms outsourced cash budgets.
The findings may further assist construction firms in gauging and reviewing their usage of
cash budgets and the purposes for which they use them with a view to optimise the benefits
derived from these findings, as well as overcoming the factors that inhibit them from using
these tools in the first place.
Northern Suburb industrial areas use cash budgets when planning their project completion.
More precisely, the study aimed to determine the types of budgets used by construction
firms, the purpose for which types of budgets are used by construction firms, the perception
of the construction firm regarding the awareness and usage of these types of budgets, and
whether these types of budgets are outsourced or internally prepared. The study was
motivated by a dearth of research on the usage of cash budgets by construction firms, the
high rate of failure of South African construction firms and the poor performance, which then
reflects high levels of non-completion and low productivity on projects. Data was collected by
means of a questionnaire survey that consisted of closed-ended questions.
The findings of the study reveal that most of the sampled construction firms frequently
prepare and use budgeted income statements and cash budgets. Furthermore, the findings
also suggest that the sampled construction firms used different types of budgets, mostly for
the purposes of allocating resources and forecasting the cost fluctuation on their businesses.
Concerning the perception and the awareness of the types of budgets, the findings revealed
that the investigated construction firms were perceived to be mostly aware of budgeted
income statements and cash budgets.
Regarding the preparation and outsourcing of cash budgets, the findings indicate that cash
budgets were mostly prepared on a monthly and yearly basis. In addition, the results also
suggest that most construction firms outsourced cash budgets.
The findings may further assist construction firms in gauging and reviewing their usage of
cash budgets and the purposes for which they use them with a view to optimise the benefits
derived from these findings, as well as overcoming the factors that inhibit them from using
these tools in the first place.
Additional information
Thesis (MTech (Cost and Management Accounting))--Cape Peninsula University of Technology, 2020
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