Budgeting, Financial Management

Assignment Help:

Budgeting:

All business owners should recognise and understand the importance of preparing and maintaining a financial budget for their business.

Budgets are an essential financial planning tool, a method of control over the day to day operation of the organisation, and an opportunity to involve people at all levels in the budget planning and implementation process.

In many cases of business failure the major contributing factor was the inability of the organisation to either comply with a predetermined budget, or a failure to prepare a budget at all.

Budgets have a number of purposes, including:

  • Assist organisations control financial and overall business results organisation
  • Assist in decision making
  • Aid in coordinating various functions and activities that make up any organisation
  • To assign responsibility to managers or staff for achieving levels of performance, and to authorise amounts that those staff can spend
  • Motivate managers / staff to obtain commitment to achieving budgeted goals
  • Increase the credibility of the organisation in the eyes of third parties

Budgeting and budgetary control can be regarded as a combination of forecasting, planning, and monitoring financial results against plans.

By forecasting aspects of revenue and expenditures (using available information), and then following up with regular comparisons of actual results against budget, managers can determine what action if any should be adopted in order to:

  • Identify and address areas of poor performance
  • Improve areas which are performing well
  • Foresee any need for additional financing
  • Anticipate and plan for growth and/or changes in business circumstances

Related Discussions:- Budgeting

Illustration of valuation using multiple discount rates, Illustration  ...

Illustration  Let us assume that Vishal Mehta & Co., (from Illustration 1) is using the following discounting rates in place of one rate:

Opposite project - net present value, A company has the opportunity to sell...

A company has the opportunity to sell an old machine. The machine is fully depreciated to a zero book value but could be sold for $5,000. If the company did not sell the machine, i

Structure and organization of treasury , I am looking for assignment help o...

I am looking for assignment help on the topic Structure and Organization of Treasury. It would be great if anyone help me.

Determine the working capital in the firm, a) Year 2 Current Ratio = 700 / ...

a) Year 2 Current Ratio = 700 / 300 = 2.33 : 1 Year 1 Current Ratio = 500 / 200 = 2.5 : 1 Year 2 Acid Test = (700 - 350) / 300 = 1.17 : 1 Year 1 Acid Test = (500 - 250) / 200 =

FINANCIAL RISK MGT, DQ #1: Discuss the challenges of VaR approaches in valu...

DQ #1: Discuss the challenges of VaR approaches in valuing risk. How does portfolio risk assessment differ from a single asset’s risk assessment? How do managers typically load ba

Explain translation gain and losses handled in different way, How are trans...

How are translation gains and losses handled in a different way as per to the current rate method in comparison to the other three techniques, which is the current/noncurrent metho

Accounting entity - accounting principle, Accounting Entity - Accounting Pr...

Accounting Entity - Accounting Principle For accounting reasons it is suppose that business has separate existence and its entity is different from that of its owner(s). In si

Working capital, applicablility of operating cycle of broilers[poultry] in ...

applicablility of operating cycle of broilers[poultry] in uganda

Revenue bonds, A revenue bond is a special type of municipa...

A revenue bond is a special type of municipal bond distinguished by its guarantee of repayment from revenues generated by a specifie

Explain why the company would probably not issue $1 million, Refer to the B...

Refer to the Bulldog battery company's cash budget in Table 18-7.  Explain why the company would probably not issue $1 million worth of new common stock in January to avoid all sho

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd