BUDGETING PART 2

BUDGETING PART 2

1. Operating

   • Summary of the planned activities of all subunits of an organisation
     • EG - Sales & cost of sales

2. Financing

   • One that embraces the impacts of the financial decisions of the firm
     • EG - Cash Budget
       • Usually prepared on a short term basis
         • Will reveal cash shortfalls or surpluses during a budget period

3. Performance Report

   • Compares budgeted performance with actual performance
   • Evaluate performance against benchmarks
   • Assign responsibility for particular business costs
   • Assign rewards to those responsible

4. Capital expenditure budget

   • Reviews and plans the capital expenditure the business needs to achieve its goals
     • EG - Planned purchases