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Business Finance - Assignment Sample

Added on - 08 Dec 2020

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BUSINESS FINANCE
Table of ContentsEXECUTIVE SUMMARY.............................................................................................................1PART 1............................................................................................................................................1i) Role of Budget in business development.................................................................................1ii) Application of traditional budgeting approach in planning of future cost management.........3(iii) Analysis of traditional budgetary system..............................................................................4PART 2............................................................................................................................................5iv) Explanation of various alternative Budget Methods..............................................................5v) Potential application of various budgeting methods................................................................6vi) Analysis of various budget methods in context of Snappy Drinks Plc..................................7CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
EXECUTIVE SUMMARYThis report summaries about the importance of business finance and how it is essential intaking decisions in order to improve the financial position of the company(McLean and Zhao,2014). This report also highlights the importance of budget report and its role in decision makingprocess and the application of budgeting approach. It also states the various alternative used bymangers in preparing the budget for the company and the application of these methods indecision making process. This report concise about the application of these methods in order toimprove the performance of the company and sustain its position in the market.PART 1i) Role of Budget in business developmentA financial limit is a device utilized by setting up an estimation of company,s income anduse, it is an apparatus which is utilized inside to assess the organization's presentation over aparticular timeframe(Slutsky and Ragusa, 2012).Mangers prepare budget to calculate thecompany's estimated revenue which a company can generate from its revenue and the estimationof expense which will be incurred by a company in order to generate the revenue. Mangers ofSnappy Drinks Plc also prepares the budget for the product launch of its new health led drink andalso to establish a new venture for manufacturing its new product. Following are some purposesof budget:Tool for Decision Making:Budget provide the estimation of company's financial healthand the sources of income and expense. It plays a crucial part in decision-making processas the mangers analyses these budgets and formulate new strategies in order to achieve itsestimate budget. It helps managers to keep track on the implementation of budget andimprove the efficiency of its business operations. Snappy Drinks Plc also uses budget totake necessary decisions in order to improve its operational efficiency and maximize itsprofit.Forecast of Income and Expenditure:Budget provide the estimated income andexpense of a company over a specific period of time, it help mangers to forecastcompany's income and expense which a company will incur over a specific period oftime. Managers use previous years budgets to analyse the reasons due to which companycould not achieve its budget income and formulate new strategies to achieve its budgeted1
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