Describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

The master budget is an integrated set of operating and financial budgets for a period of time. The master budget usually begins with an estimation of the quantity of sales and the sales budget. Using the sales projections, the remaining operating budgets are prepared, including a budgeted income statement. Using the information from the operating budgets, the financial budgets can then be prepared, including the cash budget, capital expenditures budget, and budgeted balance sheet.