Budgetary Forecasts

Budgetary Forecasts

Table of Content
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Budget refers to an anticipation of the revenue & expenses over the specified time period
and is been compiled or re-evaluated on the periodic basis. Budget could be made for the people
or group, government and business in order determine or predict the receipts or payments that
would be earned by them in coming years so that they could plan their projects or proposal
accordingly (Mariana, 2018). The present study is based on Westhorpe Leisure Limited that
owns several medium scale hotels in south-east & Wales England. Furthermore, the study
highlights the cash budget forecast for the period of 6 months by showing the net amount of the
cash inflow. Moreover, the report also presents the profit forecast for the month of January to
June for the year ending 30th June 2020 (Ríos and et.al., 2018). This shows the amount of
expenses and income that would be incurred or earned by the company in coming or future
periods.
TASK 1
Cash budget- It refers to an estimate of the cash receipts and payments during the future
time period (Turner, 2016). It mainly deals with the other budgets like labor, material, R&D
and overheads. It means as statement of the payment & receipt of the cash and is counted as an
indicator of the probable income and disbursements. In case the payments are higher than
revenue, in such type of condition appropriate cash management would be enforced. In other
words, if there is surplus, expenses seem as less than the income, in such situation decision
relating to utilizing the surplus is been taken (EQUIVALENTS, 2018). Financial plans are
been drawn up to the anticipated periods of low & high availability of the cash. Large amount of
cash balance implies that business had not able to best possible profits rate. Lower cash related
reserves means that business is unable in meeting all its dues (Abor, 2017). The firm must have
sufficient cash balances in meeting its forecasted cash needs in addition to the reserves for
meeting uncertain or unforeseen contingencies that might occur in coming years.
Jan
Februar
y March April May June
£ £ £ £ £ £
Receipts :
Collection from
Room Sales 122,625 126,925 134,750 143,575 147,125 167,500
Food & Beverage 44,500 40,100 43,300 42,600 40,200 36,500
Rent 950 950 950 950 950 950
Commission 25 55 20 15 10 40