Business Studies

Budget (from french bougette) generally refers to a list of all planned expenses and revenues.

A budget is a projection/estimation of the financial requirements and burdens that an individual/business drafts to understand their spending and financial boundaries. A budget generally outlines the situation a person will be in financially and can be created using estimates of future incomes and expenses.

When leaving a message for someone out of the office or via a phone message: Who the calling was, full name, where they are calling from, what time they rang, the details of the call, a number to get the caller back on and any specific details or requests the caller wanted the intended receiver to know.

For the second part, the head planner should draft a rough sketch of the budget. People should look for methods that will keep it

Budget formulation is not a complex task, but it must be thorough. Budgeting decisions are based on past records and future predictions. However, most of these budgeting decisions are based on prior years. One of the biggest challenges facing small organizations is budgeting based on past transactions and being able to allocate resources for the future. The organization cannot simply budget on a progressive plane for income and have too much wiggle room for expenses. Not-for-profit entities must effectively allocate resources that allow the organization to grow or perfect its operations.

Fixed costs: Costs that do not vary with output or sales e.g. managers salaries, rent and rates on business premises.

In evaluating the profitability Abercrombie and Fitch gross profit margins is high which it appears that customers are willing to pay for a company 's product, over and above the company 's cost for that product. It is logical that teens because of popularity of Abercrombie & Fitch among their age group would pay high end prices. When evaluating the net profit margin one can assume that the reason that in the first quarter and forth quarter the net profit margin ratio is in the negative is due to the fact due to the high operating expense.

Fixed Costs: Fixed costs are the costs that are independent of the amount of goods or services produced by the business. For example rent, salaries.

Fixed costs are those expenses that are necessary to be paid by a company, independent of any business activity that is does. It is one of the two components of the total cost of a good or service, along with variable cost. Fixed costs are not fixed permanently; they change over time, but they are fixed in relation to the overall production quantity for the relevant period. For example, a company may be having unexpected expenses not related to production; and warehouse costs and costs like that are fixed only over the time period of the lease.

On our first meeting with our sponsor, we were asked to do a cost analysis to determine what is the lowest price that the company can charge for each style and when would they break even. Since the company had taken reserves on almost all the shoe styles for Dr. Comfort, we had to determine the net inventory after the reserves. To accomplish this task, we created an excel worksheet that lists all the items that have been assigned a percentage of reserves (Please refer to the worksheet in Appendix).

Budgets are often met with much hesitation. Often times, managers feel that the process is often too long and really does not help them run their departments or business. Let¡¦s explore the various stages of the budgeting process and evaluate their effectiveness. Then review how the role of the budget could serve as an analytic tool and be used to evaluate organizational performance, eliminate inefficiencies in an organization's performance, and be a part of the business control cycle. How can a company go from point A to point B? According to Leading Edge Alliance, a budget is like a roadmap for business growth or driving directions (2007). What does budgeting entail?

9. The budget period 10. Budget cycle of a manufacturing firm 11. Steps in developing a master budget 12. Comprehensive budget illustrated 13. Flexible budgeting 14.

One of the most non-value-added activities within financial management is budgeting. Budgets are prepared to allocate and control how resources will be used in the future. Unfortunately, the future is hard

Budgeting is an imperative tool in management. Budgeting is beneficial because it helps companies to reach their goals that they set in order to remain operational. “Most companies prepare long term strategic plans spanning 5 to 10 years. They then fine-tune them into medium-term and short-term plans” (932). Long-term strategic plans let us know about possible product advancements, investments, markets and help us prepare for what is likely to happen in the distant future. Medium-term plans and short-term plans (short-term plans are called budgets and last for the duration of one year) are plans that are actually acted upon day to day. These are budgets that are in motion and have their own goals. A budget is defined as a formal statement of a company’s future plans (932). Managers should arrange a budget because there will be a greater chance of a company’s success and the success of the manager.

Budgeting is the establishment of budgets and the continuous comparison of actual to budgeted results either to secure the aims of the policy or provide a basis for revision (CIMA, 2000). (Peter Atrill & Eddie Mclaney, 2002) Stated that, it is very vital to recognise that budgets do not exist in a vacuum, they are an integral part of a planning framework that is adopted by well-run businesses. The role of the budget system is to answer the needs of management in respect of the discernment and decisions it is required to work and to provide a foundation for management functions for planning and control (Weetman, 2006). This essay will discuss the role and objectives of traditional budgeting and its problems. (Weetman, 2006) Assess that the