...Amina believes that a significant marketing budget would be necessary for her marketing plan to achieve its objectives. To what extent do you agree with this view? A marketing budget sets out how much money is allocated to marketing and how it intends to spend it. They are usually set before a year starts, depending on the company’s fiscal year. There are many reasons for why a marketing budget would help Amina’s business to achieve its objectives, however I believe that the success of Sounds and Vision plc does not lie with the actual size of the marketing budget, but how effectively it is used. As the business has decided to reposition itself, it needs to create awareness of its new strategy, which undoubtedly will involve a lot of expenses. This could be done through promotion, involving the media, such as a television campaign which would be expensive and therefore involve a significant budget. Not only will it need to promote its new strategy in order to gain more customers, but the case study informs us that Sound and Vision are up against a lot of competition, from both online retailers and supermarkets. Therefore in order to make sure that they are the highest competitor in the market, or to match the other strong competitors, a significant amount of money will need to be spent, using a marketing budget, for effective and persuasive advertising and promotions, in order for customers to visit the shop and spend money there, rather than elsewhere. Sound and Vision’s...
Words: 340 - Pages: 2
...Out and About plc Capital is the funds that are invested into a business to be used for the growth and expansion of a business. In the case of Out and About plc, they are going to use this capital in order to fund its marketing budget. Out and About have a current ratio of 0.87:1 and an acid test ratio to one. This suggests that they are suffering from very severe liquidity problems especially short term liquidity. As they have £800 million worth of non-current assets, it would be useful for them to sell off some of these assets because it will increase the amount of cash they have, thus also increasing their current assets figure. Also, they could then use this cash to also reduce its current liabilities figure by paying off some its trade payables; this then will cause both their current ratio and acid test ratio to increase. Trade debtors are worth £70 million out of the £140 million of current assets. This means that they make up 50% of the total current assets. The trade receivables take 87 days to pay the business back; this suggests that they are to very quick in terms of repayment. This will cause further problems for Out and About plc because it could mean that they may not receive payments from its debtors causing them to write these debts off as 'bad debts'. If these bad debts start to build up, this can cause a business's expenses to increase and the value of the receivables asset to decrease. One major concern for Out and About plc is its profit margins...
Words: 522 - Pages: 3
...OF THE BUDGETTING Budget is a combinations of company activities within which a company coordinate to a common plan for future period. The budget is not something that originates 'from nothing' each 'year - it is developed within the context of ongoing business and is ruled by previous decisions that have been taken within the long-term planning process. When activities are initially approved for inclusion in the long-term plan, they are based on uncertain estimates that are projected for several years. These proposals must be reviewed and revised in the light of more recent information. This review and revision process frequently takes place as part of the annual budgeting process, and it may result in important decisions being taken on possible activity adjustments within the current budget period. The budgeting process cannot therefore be viewed as being purely concerned with the current year - it must be considered as an integrated part of the long-term planning process. The conventional approach is that once a year the manager of each budget centre prepares a detailed budget for one year. For control purposes, the budget is divided into either 12 monthly or 13 four-weekly periods. The preparation of budgets on an annual basis has been strongly criticized on the grounds that it is too rigid and ties a company to a 12 month commitment, which can be risky because the budget is based on uncertain forecasts. (Drury C (2008)) Stages for preparation of budget According to Drury...
Words: 3217 - Pages: 13
...TE AM FL Y THE JOSSEY-BASS Academic Administrator’s Guide to Budgets and Financial Management The Jossey-Bass Academic Administrator’s Guides are designed to help new and experienced campus professionals when a promotion or move brings on new responsibilities, new tasks, and new situations. Each book focuses on a single topic, exploring its application to the higher education setting. These real world guides provide advice about day-to-day responsibilities as well as an orientation to the organizational environment of campus administration. From department chairs to office staff supervisors, these concise resources will help college and university administrators understand and overcome obstacles to success. We hope you will find this volume useful in your work. To that end, we welcome your reaction to this volume and to the series in general, including suggestions for future topics. THE JOSSEY-BASS Academic Administrator’s Guide TO Budgets and Financial Management Margaret J. Barr Copyright © 2002 by John Wiley & Sons, Inc. All rights reserved. Published by Jossey-Bass A Wiley Imprint 989 Market Street, San Francisco, CA 94103-1741 www.josseybass.com No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission...
Words: 40350 - Pages: 162
...A budget allows a business to plan because it states what money is available and what the money can be used for. For example, a business has one hundred thousand pounds’ worth of a budget. Fifty thousand pounds of that budget has to be spent on wages, twenty thousand has been spent on table and chairs, ten thousand has been spent on IT, ten thousand has to be spent on resources such as paper, printer ink and stationery and the remaining ten thousand has to be spent on lighting. This example has planned what the business needs to spend their money on. The business can only spend their budget on the equipment that is needed; the business cannot spend the budget on desired items. Monitor: A budget allows a business to monitor because it shows what money of the budget has been spent and what the budget has been spent on. For example, a business has budgeted to spend fifty thousand pounds on wages but in that time they have given pay rises, the business now has to pay sixty thousand pounds on wages. Monitoring the budget shows that pay rises have been granted to employees but it also shows that other sectors of the budget have had to be compromised. If one sector has risen and other sectors haven’t been compromised but have stayed the same means that the budget has been exceeded. When monitoring a budget, it also shows if a budget has been exceeded. Exceeding a budget means that the business has spent more money than they should have but can also mean that the business...
Words: 1692 - Pages: 7
...business builder 5 how to prepare a cash budget zions business resource center zions business resource center 2 how to prepare a cash budget At its most basic level, a budget is a plan for owners and managers to achieve their goals for the company during a specific time period. In this business builder you will learn the fundamental concepts of cash budgets and how to evaluate your budget on a month-to-month basis. What You Should Know Before Getting Started • The Purpose of a Cash Budget • Why Prepare a Cash Budget? 3 3 4 How to Create a Cash Budget • Time Period • Desired Cash Position • Estimated Sales and Expenses • Cash Flow Budget Worksheet 4 6 6 6 9 How to Analyze a Cash Budget Conclusion Checklist Resources 10 11 11 12 how to prepare a cash budget 3 what to expect This Business Builder will introduce you to the fundamental concepts of cash budgets and outline the steps necessary for preparing a cash budget for your business. It will also show you how to evaluate your budget on a month-to-month basis. This Business Builder assumes that an income statement and a balance sheet have been prepared for your business. Information from these financial statements are an integral part of creating a budget. Without that information, this Business Builder may not be as helpful as it could be. what you should know before getting started The Purpose of a Cash Budget At its most basic level, a budget is a plan. It is a plan for owners and...
Words: 2802 - Pages: 12
...In this task, the budget schedule and proformas as well as the flexible budget were reviewed. Below you will find my analysis and recommended corrective actions as well as how management by exception applies. Budget Planning Concerns Competition Bikes has a good starting point for a budget but is overall weak and has several budgetary concerns. A few of those items are mentioned for budget planning below. Advertising & Research Development. Competition Bikes is expecting an increase in sales in year 9 yet they are not investing in any more in advertising or research and development. In year 7 when sales were the highest, Competition Bikes spent $32,760 in advertising. In year 8 when the advertising budget fell to $27,428, so did the sales. Although management is predicting an increase in the market for year 9 and the advertising expense is 2% of projected gross margin, this may be unrealistic. Annual Budget. Quarterly budgets are more efficient for planning, coordinating, evaluating, and controlling costs. The budget for Competition Bikes only shows annually. Sales differ by season with the company so their budget should reflect a similar breakdown. Quarterly budget would be closer to the seasons than just an annual one. Further breakdown of the budget will help spend money more wisely not only where it is needed, but when. Vague Line Items. The budget shows many lines with broad terms and some with no description at except “other”. Other long term liabilities...
Words: 2699 - Pages: 11
...Budgets Rosa M. Oyola-Jerez American Military University FINC 405 B004 Professor: Greg Harms April, 30, 2011 Budgets Here would be explain what is a master budget? What factors cause budget variances? It would also be explain the difference between a favorable and unfavorable variance, and an example of it would be provided. It would also be explain the difference between static and a flexible budget with an example of it. A master budget in my words is a recompilation of all different budgets of a company, in other words the master budget would have many other budgets describing the different parts of the operations in the organization. An example of a budget would begin here by the knowledge of the behavior of the cost, that is to say, the answer of a cost to different volumes of the production, turns out to be essential in the planning and the cost control. It can be perceived the behavior of the cost whether since the profitable angle of the business in its entirety. The behavior of the cost plant a practical aspect: upon enlarging or to diminish the production (level of activity) in a center of responsibility with each expense assigned to that center that is going to conduct an individual budget. A budget is a statement of the results expected, aforesaid in numerical terms. It can be considered like a program "aforesaid in I number". In fact, to the financial budget of operations often him he is called "plan of utilities". The budget can be expressed in financial...
Words: 1068 - Pages: 5
...Budgets and Funds — The City of Portland Introduction In each government organization’s management systems, the budget plays a significant role which reflects its policy, goals, and priorities. To understand better, it is necessary to know the purpose and function of budget. This paper will talk about why and how to use budgets and funds in governmental accounting by analyzing the budget of the city of Portland. First of all, I will introduce the fund system of accounting and compare the different budgets for funds. Second, I will analyze the budget of Portland to give an idea that how they use funds according to their purpose and restrictions, and how this can be conveyed to the voters so they can ask the right questions to make a good choice in the election. Last, I will give my opinion on how government can explain the budgets used more effectively for the public to understand. Fund System and Budget To understand how budget be used, it is necessary to know the fund system of accounting first. Overall in governmental accounting there are three broad categories of fund types: governmental funds, proprietary funds, and fiduciary funds. First, the governmental funds, which are taxed based, receive sales tax, property tax, vehicle tax, and other state and federal taxes as their main source of revenues. There are five types of funds in this category: general fund, special revenue funds, capital projects funds, debt service funds, and permanent funds. Second, proprietary...
Words: 1528 - Pages: 7
...Kelsey Budget Report September 24, 2012 Kelsey Budget Report Kelsey is located in the Northwest valley and has a population of over 600,000 residents. Kelsey’s budget plays an important role in the City of Kelsey Government. Kelsey has an extensive budget and financial report because of the size of the city and the number of residents that live in the city. Recently the mayor of Kelsey has put in a request to Kerry, the budget director. The request asks that the budget director needs to revamp the City of Kelsey budget for the upcoming year. Because of an increase in population in the City of Kelsey, statistics show an increase in crime in the City of Kelsey that is above the norm. This brings about a need for more police officers (University of Phoenix, 2011). Another issue is the recent reduction in federal pass-through funds, which will have a negative impact the budget for the City of Kelsey. At the federal level, a budget reform has put pressure on the City of Kelsey and other policing agencies to implement the use of federal funds within the allotted period. The mayor of Kelsey does not believe that state aid is an option for the City of Kelsey to make up the budget deficit, and increasing taxes does not appear to be an option because the state and local government does not want to increase taxes as this time. A final issue is a local club; the Sierra Club does not want more police officers and instead wants the City of Kelsey and the state to build more...
Words: 1494 - Pages: 6
...private companies as well as budgeting of families, public budgeting deals with generation of income, and then planning and monitoring how that incomes are being spent. This study aims to explain and understand the budgeting process in the Republic of Kosova by investigating which are the pros and cons in their process. To compile the report, only secondary data have been used such as literature and publications taken on official websites. Public budgeting, involves in itself some other tasks that sometimes could be incompatible and may erode the ability to perform the other task. These tasks includes: setting goals and priorities, linking goals to actions, managing the economy, promoting accountability, controlling the use of public resources, promoting efficiency and effectiveness, social planning and reform, keeping the process manageable. The Kosovo budget is prepared by The Ministry of Finance in coordination with organizations, and has to be approved in the end by the Assembly of Kosova. The budget process in Kosovo is regulated by the Law on Public...
Words: 1706 - Pages: 7
...Performance Measures Click Link Below To Buy: http://hwcampus.com/shop/acc650-module-4-budgeting-performance-measures/ 1. A formal budget program will almost always result in: a. higher sales. more cash inflows than cash outflows. b. decreased expenses. improved profits. a detailed plan against which actual results can be compared. 2. Darling Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 12,000 Actual variable overhead incurred: $730,000 Actual machine hours worked: 60,000 Budgeted fixed overhead $72,000 Planned level of machine-hour activity 50,000 If Darling estimates four hours to manufacture a completed unit, the company's standard fixed overhead rate per machine hour would be: a. $12.00. $14.40. $14.60. $15.00. some other amount. Standard fixed overhead rate per machine hour = Budgeted fixed overhead/Planned level of machine hour activity $720,000/50,000 machine hours $14.40 per machine hour 3. Wilson Corporation is budgeting its equipment needs on an ongoing basis, with a new quarter being added to the budget as the current quarter is completed. This type of budget is most commonly known as a: a. capital budget. rolling budget. revised budget. pro-forma budget. financial budget. 4. Bird plans to sell 5,000 units each quarter next year. During the first two quarters each unit will sell for $12; during the last...
Words: 1288 - Pages: 6
...Introduction to Budgeting A budget is any output that comes after various inputs are inserted along with processes with the intention of gaining a futuristic idea of whether or not one should go ahead with a financial decision. In other words, it is a combination of plans which are linked together for the purpose of describing a business or entity’s future operations. The budgeting process usually starts by planning strategies, which are done by the top managers/management such as department heads and the CEO of a company. Moving on, after the strategy has been decided, the managers implement it upon multiple levels, which accumulates and becomes a master budget. The plan contains multiple budgets such as a sales budget, production budget, direct labor, direct materials, manufacturing overheads, sales and administration along with a fixed asset budget and many others, depending upon the company itself and its goals. The budget made ultimately contains the following three primary things among many others; Income Statement, Balance Sheet and a Cash forecast. Role/Importance of Budgeting Creating a budget and then implementing it is integral for any ‘body’, whether it be government, private or a public entity. A budget as stated before is developed in accordance with the mindset that the entity has to make a profit from the implementation. A budget can be of various types, for instance, a company can make a budget for forecasting whether or not it should make a decision related...
Words: 1803 - Pages: 8
...The City of Las Vegas, Nevada Budget Process Sarah Molda Missouri State University The City of Las Vegas, Nevada Budget Process In accordance with Nevada state Law, City governments in Nevada are created either by general law or special charter. The City of Las Vegas is a special charter city, and operates under a council-manager form of government as proscribed by Nevada Revised Statutes (NRS) Chapter 268, with our mayor elected at-large and six City Council members representing the 6 single member wards that represent the City. The vision of the City of Las Vegas is to be “a world-class, vibrant, affordable, economically and ethically diverse, progressive city where citizens feel safe, enjoy their neighborhoods and access their city government. Its mission is to provide residents, visitors and the business community with the highest quality municipal services in an efficient, courteous manner and to enhance the quality of life thorough planning and visionary leadership.” (City of Las Vegas) The Las Vegas city council oversees the general administration, makes policy, and sets budget. The council appoints a professional City Manager who is charged with the running day-to-day operations, with the City Managers office being responsible for the administration and operation of all municipal services for the City of Las Vegas as well as the oversight for all redevelopment and economic development. The City Manager's staff also tracks the progress of various projects,...
Words: 2041 - Pages: 9
...The purpose and nature of the budgeting process A budget is a financial document used to project future income and expenses. For manufacturing, budget show the predict finance about the number and the estimate cost of all items which related in production such as: overhead cost, material, labor, revenue, expenses, assets, liabilities, etc. From these predictions, it can help company picturing out the future cost and profit. The budgeting process may be carried out by individuals or by companies to estimate whether the company can continue to operate with its projected income and expenses. Purpose and advantages Budgets play an important role in the manufacturing and production process because companies will allocate each production cost to products. Spending too much money on specific activities will raise individual product costs, requiring companies to charge consumers for inefficient operations[1]. There are seven main purpose of budget. Firstly, budget can ensure the achievement of organizational objectives and push organizational planning. The reason is that a performance budget is a strategic tool that enables a company to win the competitive game. Moreover, a budget is basically a money plan, outlining company financial goals. Having a budget, company can well establish and regulate funds, set and achieve company financial objectives, and make advance decisions as to how company want company finances to function well for company. The main...
Words: 2713 - Pages: 11
