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Business Finance EXECUTIVE SUMMARY 3 PART 13 (i) Purpose of budgets in context to the development of business model

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Added on  2020-12-30

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Business Finance EXECUTIVE SUMMARY3 PART 13 (i) Purpose of budgets in context to the development of business model 3 (ii) Traditional budgeting approaches 5 (iii) Traditional budget is appropriate to all or some part of business in future form 5 PART 26 (iv) Rolling, zero based and activity based budget 6 (v) Application of above mentioned budgets 7 (vi) Analysis budgeting methods in context to the corporation 8 CONCLUSION 8 REFERENCES 9 EXECUTIVE SUMMARY This report summarise about business

Business Finance EXECUTIVE SUMMARY 3 PART 13 (i) Purpose of budgets in context to the development of business model

   Added on 2020-12-30

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Business Finance EXECUTIVE SUMMARY 3 PART 13 (i) Purpose of budgets in context to the development of business model_1
Table of ContentsEXECUTIVE SUMMARY ............................................................................................................3PART 1 ...........................................................................................................................................3(i) Purpose of budgets in context to the development of business model....................................3(ii) Traditional budgeting approaches .......................................................................................5(iii) Traditional budget is appropriate to all or some part of business in future form..................5PART 2 ........................................................................................................................................6(iv) Rolling, zero based and activity based budget......................................................................6(v) Application of above mentioned budgets..............................................................................7(vi) Analysis budgeting methods in context to the corporation...................................................8CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
Business Finance EXECUTIVE SUMMARY 3 PART 13 (i) Purpose of budgets in context to the development of business model_2
EXECUTIVE SUMMARY This report summarise about business finance & purposes of preparing a budget for thecorporation. As the finance is the essential need of business and without it business operationscan not perform. In the financial activities budgets plays an important role and it required for thecompany to make budgets so that it can estimate income and expenses related to the future.There are various topics are covered in this report such as: application of traditional budgetingapproaches and systems, alternative budget methods like rolling budgets, zero budget andactivity based budgets and the budgeting methods which are suitable for the company. PART 1 (i) Purpose of budgets in context to the development of business modelBudget is an estimation of future income & expenses and it is related to a specific periodof time. In the financial planning it is very important and finance manager of an organisation isresponsible to prepare budget in order to achieve the goals of company. As Snappy Drinks makesbudgets in order to launch new drinks & to establish a new manufacturing venture. There arevarious purposes of making budgets which are as mention below: To forecast income and expenses: Budgets are helpful to estimate future income &expenses. As Snappy Drinks is planning to set up a new manufacturing plant and for that purposeit is required to analyse the income and expenditures which are arises in the future so thatcompany can measure the of its business after completion of one year (Vasant, 2012).Tool of decision making: For the growth of busienss it is important to take betterdecisions other wise company can not sustain for a long term and it have to suffer form thefinancial losses. As the manager of Snappy Drinks can take effective decisions which are basedon budgeted income & expenditure so that business of organisation will grow and get success. Monitor the business performance: To monitor the business performance is importantfor the organization so that it can know how the work is going and what are the required actionscan be taken for the further improvement. As Snappy Drinks can measure its performancethrough budgets because it helpful to estimates income and expenditure and on the basis of itcompany can make comparison with previous year and analyse the growth and performanceimprovement. Corporation can determines its financial performance by comparing actual costaccrued in manufacturing with the budget cost (Ziemba and Vickson, 2014).
Business Finance EXECUTIVE SUMMARY 3 PART 13 (i) Purpose of budgets in context to the development of business model_3
Prepare an action plan: To prepare an action plan is important for an organisation sothat predetermined goals and objectives can be accomplish as per the requirement. As SnappyDrinks can make budget and on the basis of it company can make better plans which are helpfulfor the growth and success of busienss (Storey, 2016).Process of preparing budget: To prepare a budget it is require to follow a systematic process and it is depend upon thesize of corporation. There are following steps which are followed by Snappy Drinks and theseare as mention below: Set realistic goals: For an organisation it is important to set specific goals in order toachieve the targets and without it objectives can not be fulfil. As Snappy Drinks can set realisticgoals in context to the business growth while make budget and it should be for specific timeperiod. (Scholes, 2015).To determine income and expenses: To analyse income and expenses is important forthe organisation and for that purpose income & expenditures of previous year is require to bedetermine. As a result it will be easy for Snappy Drinks to analyse the gain and expenses forfuture and it also provide help in comparison with previous year and current year. Availability funding: To know the sources of funds are important in order to carrybusienss activities for a long term. While making budget, it is important for Snappy Drinks tomention the sources of funds which are helpful for the growth of business. Set savings & debts pay off goals: As Snappy Drinks can determine savings and incomeand also pay off debt so that it can know the performance of business. Create budget package: It is require to copy forward the basic budgeting instructionsform previous year and it is necessary to update information of actual expenditures of currentyear & analysis these after after create package of budgets in context to Snappy Drinks. Review the budget: After making budget it is important to review the budget so thatshortcomings can be analyse and corrective actions can be taken for further improvements(Rogers and Makonnen, 2014).As budget making process is helpful to develop the busienss model and it is needed forthe future planning and strategies. On the basis of plans and strategies organisation can developits business model reason being it comprise of all financial information. The company SnappyDrinks wants to take two important decisions such as: to launch new drinks and to set up new
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