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Business Finance Assignment - Snappy Drink Plc

   

Added on  2020-11-12

11 Pages3319 Words196 Views
BUSINESS FINANCE

Table of ContentsEXECUTIVE SUMMARY ............................................................................................................3INTRODUCTION...........................................................................................................................4PART 1............................................................................................................................................4(i). Purpose and processes of budgets for development of business model.................................4(ii). Application of traditional budgeting approaches..................................................................6(iii). Importance of traditional budgetary system for better future..............................................7PART 2............................................................................................................................................8(iv) Explanation of rolling, zero based and activity based budget...............................................8(v) The potential application of these methods............................................................................9(vi) The most appropriate budget for the company.....................................................................9CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11

EXECUTIVE SUMMARY In business context, the money needed to develop, establish and run business inappropriate manner is known as business finance. In the report, proper and clear discussion onthe role of budgets and importance of business finance. Budgets support in proper managementof financial operation that bring more accuracy in operations so that expenses can be forecasted.In addition, the report gives detail about use of traditional budgets that are used by company.Additional, there is a vast summary about the importance of different budgets such as rolling andzero-based-budgeting that makes easier for the management to take valuable decision.

INTRODUCTIONThe below report is going to identify the purpose of preparing a budget. It also showswhat processes are important for a company in order to prepare a budge and help achieve successin the set business model. The report demonstrates the application of traditional budgetingapproaches in order to plan the future cost management of Snappy Drink Plc. It is anorganisation which produces energy drink (Reynolds, 2016). The company is in the business ofthe energy drink from the past 15 to 20 years. The report will also evaluate the importance ofbudgeting in the organisational environment and types of budgets. PART 1Business finance is defined as the credit and money that are required in order to run thebusiness activity. In simple term it means that proper procurement and utilization of funds insystematic manner so that companies are able to carry their operation in efficiently andeffectively. In recent time, companies are needed to plan for their future expenses so that suddendrastic changes can be meet, thus they prepare budgets. With the support of budgets manager ofcompany are required to make meaningful plans that aid to spend their funds. Snappy drink plc isproducing energy drink from last 15 years and producing 60 product, with about 125 staffmember working to make company effective (Mauskopf and Earnshaw, 2017). The companywas using traditional budgeting system from staring (What is budgets, 2019). Therefore newfinance director is planning to change the system by applying ZBB and ABB that support incompany to prepare advance plan so that any future contingency can be resolved. (i). Purpose and processes of budgets for development of business model.In micro economic the concept of budget means the proper estimation of revenues andexpenses in a particular time frame so that decision are taken for better improvement. In businessera, the corporate budgets are necessary for operational to make them extreme efficient. Apartfrom crucial resources, a budget also assist in defining goals, evaluating process and countingoutcomes and plan for future contingencies. The process of making budgets start with forecastingassumption for future that are related to estimated sales trends, condition of market, cost trendsand entire look on economic situation. In snappy drinks manager use to prepare budgets in orderto brink stability within their business activities. There are various purpose of preparing budgetsthat are discussed below:

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