management 6

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Author:
marinir
ID:
177593
Filename:
management 6
Updated:
2012-10-14 16:02:40
Tags:
budgeting
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Description:
budgeting
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  1. budget
    plan for the future 

    emerges from companys objectives, goals, and mission

    looks forward (accounting looks back in time)
  2. types of budgets
    operating budget

    capital budget

    zero based budget
  3. operating budget
    most common, made from income statement, revenues and expenses 

    esimates for the next year if you have enough money to run the company 

    used in planning process (goals)
  4. capital budget
    includes estimated expenditures for fixed assets 

    takes into consideration long term purchases

    assets that would benefit the company for many years
  5. zero based budget
    most difficult to prepare and provides the most detail

    start with all revenues and expenses at 0 and need to justify each line to be necessary and realistic

    used if company is overspending 
  6. benchmarking
    compare one companys actual performance to other companies budget within the industry 
  7. 5 key purposes for developing a budget
    planning (how much money will be needed to operate)

    supporting, communication and coordination (where money goes)

    assigning resources

    benchmarking

    assessing performance (assess own performance over time)
  8. steps of a budget
    gather every financial statement and record all income and expenses

    break expenses into fixed and variable

    review monthly
  9. methods of budget development
    replicate the prior year and no changes

    use last years with anticipated changes on each line

    develop one using may years of info 
  10. personal income statement 
    income- cash inflows

    expenditures- outflows

    use ratios and analyze your personal spending 

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