Neo Plastic Ltd: Budgeting, Analysis and Business Development

This report provides a comprehensive analysis of budgeting practices for Neo Plastic Ltd, a molding plant in the United States. It begins by outlining the benefits of having a budget and how the budgeting process aids in business development, including planning orientation, profitability review, performance evaluation, and funding planning. The report then identifies key areas within the business that the budgeting process should address, such as identifying problems, stakeholders, and project objectives. A critical evaluation of traditional budgetary systems is presented, assessing their suitability for the company's future. The report proceeds to explore alternative budgeting systems, such as fixed and flexible budgets, zero-based budgeting, rolling budgets, and activity-based budgeting, highlighting their potential benefits for Neo Plastic Ltd. It discusses the practical application of these methods, including potential challenges, and concludes by analyzing which methods or combinations would be most appropriate for the company, offering insights into effective financial planning and business strategy.

Business

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
(i) Company benefits from having a budget and how the budget process helps development of
the business.................................................................................................................................1
(ii). Identifying the key areas of the business which the target process needs to address. .........3
(iii). Analyzing whether traditional budgetary system is appropriate to the business in its
planned future from.....................................................................................................................4
PART 2............................................................................................................................................4
(iv) An alternative budget system and what benefits they might offer to the company.............4
(v). The Potential application of these methods to the company including a discussion of the
potential problems they may give rise to....................................................................................6
(vi). Analyzing whether one of these methods or a combination would be more appropriate to
the company................................................................................................................................7
CONCLUSION ...............................................................................................................................7
REFERENCES ...............................................................................................................................8

INTRODUCTION
Business is the activity that makes money by producing or buying and selling products
and services. An organization creates its business operations on the basis of their scale level and
makes good quality of services for their targeted customers. Every business required enough
customers to whom they selling their own product and services.
Present study will be based on Business for that, Neo Plastic Ltd. Will be taken into
action It operates as a molding plant in the United States. Overall, it will present some benefits
from budget and how its process will help in the development of business.
It will also discuss the traditional approaches to budget. Besides, it also helps to
accomplish the overall goals and objectives will also help to make the process very much
effective. Besides, this will also help to make better approaching task making performance.
Overall, it brings new better environmental goals.
PART 1
(i) Company benefits from having a budget and how the budget process helps development of
the business
Budget is the most essential and consequences that go beyond the financial dimension
and have more to do with business management. Overall, budgeting is the most essential and
target essential goals. That helps to cover the all necessary aspects of business organizations. It
also makes proper implementing process that helps to take the best challenging behavior goals.
Overall, Neo Plastic Ltd (Bryman and Bell, 2015). Having budget every year on the basis of new
profit revenue. It helps to bring new opportunity and task oriented process in order to meet the
organization goals and target audience.
There are some benefits of budget that helps company to make better decision in the business
activity.
Planning orientation: The process of making budget takes management away from its
short term, day- to- day management of the business and forces it to think longer term. The main
goal of budget is to make proper planning of making funds and task oriented processes. This
benefit is the most essential and chief goals of budgeting. Besides, it also helps to make proper
arranging and effectual process that helps to make hard-hitting. Overall, that helps to make the
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process that helps to take better decision making approach. Besides, it is the long process and
task oriented performance in order to meet the best effective process.
Profitability Review: It is another plus point and effective process that helps to keep the
business activities safe and secure (Carroll and Buchholtz, 2014). Overall, a properly managed
budget will make company effective and processing according to better quality management. It
also helps to bring new and the best approachable management tool that helps to manage day to
day activities.
Assumption review: Budget will force management to think about why the company is
in business and it helps to review the key elements of the business environment. That help to
bring the new opportunity to bring new productive environment.
Performance evaluation: it is another benefit that has been take the best approachable.
A periodic re-evaluation of these issues may result in altered assumptions (Crane and Matten,
2016). Budget will help to review an overall process that helps to make the best productive goals
and nature of things. Besides, Neo Plastic Ltd works with different employees to set up their
goals for a budgeting period. Company also ties up with the procedures that help to make proper
impingement process. Then company creates a budget with actual reports to give employees
feedback regarding how they are progressing towards their goals. Overall, budget also helps to
form a performance appraisal purpose. Besides, overall this brings new target oriented process
that helps to make proper planning.
Funding Planning: It is the structured process that helps to cover the proper
implementing process that helps to make proper output performance. Besides, it also brings new
growth, and proper managed budget that should derive the amount of cash that will be spun off
or which will be needed to support operations. This helps to make proper implementing process
and make planning of proper implementation and effective planning goals.
Cash Allocation: There is an only a limited amount of cash available to invest in fixed
assets and working capital (Drucker, 2017). Budget is the best planning tool through company
can easily make cash allocation in the best possible manner. Besides, it also makes clear and
implementing process that helps to build the nature of fact. Overall, need of cash availability is a
must to provide the best approachable task oriented process of things. This is the limited amount
of cash that is for fixed assets and working capital. Budgeting process forces management to
decide which assist are most worth investing in.
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Bottleneck Analysis: This makes the process of evaluating thing or another benefit tool
for Budget. Overall, it brings new opportunity and growth. This advantage will help company to
think about to concentrate on what can be done to either expand the capacity of bottleneck or to
shift around it (Edel, 2017). Overall, it brings new opportunities for a company to bring new
changes and implementing proper management tools of budgeting. Overall, budget helps to finds
the best approachable task directed activity that will help to convey the content directed
cognition and will also help to take better goal oriented process.
(ii). Identifying the key areas of the business which the target process needs to address.
Business is the most essential and target goals that makes according to nature of growth.
Besides, it also helps to control the effective process that helps to control the best approachable
task oriented process. Overall, it brings new making things that helps to perform in the best
approachable manner (Eriksson and Kovalainen, 2015). Neo Plastic Ltd. Should needs to make
proper planning and implementing process that helps to make proper implementing planning in
order to meet the needs of organizations. Business essential target area are must be approachable
and target market oriented goals that helps to protect the best approaching goals. It helps to take
the better opportunity and goals. Neo Plastic Ltd should identify their key potential areas that
helps to control the best approachable target market goals and earn better objective goals. There
are some areas that should be adopted by the organization.
Identify the real problem
Identify the real problems of business is very essential to measure the lacking point in the
business which needs to be correct in order to achieve business objectives and goals. That also
needs to make better target market audience. That also helps to make the proper changes and
target market goals. Better opportunity and growth helps to take the better chance to achieve best
target goals (Galí, 2015). This overall, it brings new opportunity and target goals. Overall, it
brings new best approachable target goals. Overall, it helps to bring new opportunity and growth.
This makes the overall, process helpful and most reliable and effective. Manager also needs to
make the process that helps to take the better growing things.
Identify the stakeholders.
It is the another factor that helps this also helps to take the best approach in order to
identify the growth and task making performance. Stakeholders are the most productive and
necessary for the business growth. That helps to make the best approach to meet the needs of
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business. Moreover, it brings new better opportunity and growth that helps to take the best
approachable task oriented performance (Goldratt, 2017).
Identify the project objectives
It is the another area of business that should be identified by the company that helps to
check the better performance. This helps to meet the objectives in more proper manner.
(iii). Analysing whether traditional budgetary system is appropriate to the business in its planned
future from.
Traditional budget tool indicates that funds should be allotted in specific manner in order
to meet some financial obligations. Such as rent, entertainment or insurance. Budget provides
opportunity to designed to help to allocate or invest income according to budget. In the context
of traditional budgetary system (Goleman, 2017). Company take part of previous year
expenditure in the new budget proposal and only increments are a matter of debate. Besides, zero
base budgeting concept is based on the assumptions that every rupee of the expenditure, should
be justified. It is accounting process or method. That helps to make better objective and target
oriented goals. Moreover, it brings new opportunity and growth. Moreover, it helped to define
the specific and effective manner of growth that helps to take the best approachable goals. It
gives better opportunity and growth in order to gives the better opportunity and growth. Overall,
it brings new opportunity to make effective work and better growth. It gives better growth and
target oriented process that helps to make the effective nature of growth for the company
(Herrmann and Herrmann-Nehdi, 2015.).
PART 2
(iv) An alternative budget system and what benefits they might offer to the company.
Alternative budget system for Neo plastic Ltd and their benefits to the company
Fixed and Flexed Budget:
Fixed budget – This is a budget which is set at beginning of the year or budgeting period
and do no change throughout the year or such budgeting period. There are two method of
arriving at fixed budget - Top Down and Bottom Up method.
Benefits to the company :
 Measures profits in advance (Scholes, 2015).
 Measures long term success by comparing yearly budgets.
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 Keeps the cost of firm down.
 Creates financial discipline.

Flexible budget -This is a budget which recognises the existence of different cost
behavioural patterns and take in account the changes as production volume changes. For flexed
budget understanding of cost behaviour in relation to output is necessary as it has significant
effect on cost and financial decision.
Benefit to the company:
 Taking advantages of the opportunities.
 Adjustment can be done for changing cost and profit margins.
 Better control over cost.
 Up to date information about current data.
Zero based budget:
This is a budget in which all the expenses are taken into account for every new period.
The process starts with a zero base and every function in the organisation is analysed for its need
and costs. Then budgets are made accordingly as what is needed and what is no for the upcoming
period.
Benefit to the company:
*activities, expenditure, inefficient and obsolete operations can be easily identified and removed.
 Wasteful expenditure by workers is avoided.
 Respond to any change in dynamic business environment.
 Provides in depth assessment of all operational activities of the firm.
Rolling budget:
This is a budget which is updated regularly on a period basis, by adding further time and
deducting earlier time. The budget is prepared for first moth in complete form and for subsequent
months it is prepared in skeletal manner. For subsequent months quarterly and monthly basis
budget is prepared n the basis of previous month's experience and updates.
Benefit to the company:
 It is easy and quick method f budgeting.
 Activities which are uneconomic can be continued in next year.
 Previous problems and inefficiency are discovered and dealt with.
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 Provides more realistic and up to date information.
Activity based budget:
This is budget which is carried out on the basis of the activities which are carried out I the
organisation. Individual activities are assessed along with their strength and contribution. They
can be ranked and prioritised accordingly to reach cost drivers (Sekaran and Bougie, 2016). The
budget is then prepared on the basis of cost drivers and the activities.
Benefit to the company:
 Control over the cost since the budget is based on the cost drives and activities.
 Strategical changes can easily be accommodate in the budget.
 By evaluating the performance measures designed for monitoring the progress can
identify success factors.
 Fundamental basis is provided by different activity level for preparation of budget either
by zero based budgeting or incremental budgeting.
(v). The Potential application of these methods to the company including a discussion of the
potential problems they may give rise to.
Company facing many issues and problems in the company that will promote the
ineffective environment and better environmental growth factor. This makes the process
inefficiency and having low performance goals (Storey, 2016). Overall, it brings new major goal
oriented process that helps to make the approachable decision making approach. Overall, some
activities and practices will help to control the rising issues. Such as effective communication,
Ask for feedback, create new solution, encourage collaboration, Consider Hypothetical, test
thoroughly, track progress. These terms will help to eradicate some issues and target goals.
Effective communication: Effective communication is going to benefit tremendously
from transparent communications. This also helps to come over from the activities. Better if this
service take opportunity and growth in order to make some more effective work and getting
better opportunity to take some best approachable performance (Sekaran and Bougie, 2016).
Create New solutions: It also helps to make the better services from the behalf of better
service growth. Learning from past mistakes will help to fix the company issues. That helps to
create new opportunity and growth in order to meet the needs of the organization and goals.
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(vi). Analysing whether one of these methods or a combination would be more appropriate to the
company.
Effective approaches and methods will help company to fix their lacking point. Besides,
it also helps to make the best approachable goal oriented process that helps to fix better
opportunity and growth (Eriksson and Kovalainen, 2015). Business forecasting and better growth
will give chance to make better opportunity and growth to fix the plans. Besides, it will also
contribute the things in more generating manner. Overall, it helps to create new opportunity and
growth. Some new methods and process will help to control overall process or things. Business
forecasting will help to make better opportunity to make approachable performance making task.
There are some methods and techniques will help to control better things and opportunity.
 Specification: Carries items on your books at their actual cost, specific and task oriented.
It will also help to take the better opportunity and growth making performance. Overall, it
brinks new opportunity and growth (Galí, 2015).
 Weighted, first-in, First Out: It typically used when products are physically in
distinguish or easily substituted, like commodities. This method will help to fix all those
methods and better target goals.
There are some other methods as well such as liquidity ratios, solvency ratios, profitablity
ratios, coverage ratios etc (Herrmann and Herrmann-Nehdi, 2015.).
CONCLUSION
From the basis of above study, it has been seen that business having some essential goals
and having huge functional management objectives. In order to meet the objectives and goals.
Moreover, present study has been based on business and covered most effective activities and
information of Neo Plastic Ltd. Through company can utilize all information for making good
financial planning and makes best budget for the company future.
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REFERENCES
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Business Press.
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guide to social research. Sage.
Galí, J., 2015. Monetary policy, inflation, and the business cycle: an introduction to the new
Keynesian framework and its applications. Princeton University Press.
Goldratt, E. M., 2017. Critical chain: A business novel. Routledge.
Goleman, D., 2017. Leadership That Gets Results (Harvard Business Review Classics). Harvard
Business Press.
Herrmann, N. and Herrmann-Nehdi, A., 2015. The Whole Brain Business Book: Unlocking the
Power of Whole Brain Thinking in Organizations, Teams, and Individuals. McGraw-Hill
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Macaulay, S., 2018. Non-contractual relations in business: A preliminary study. In The Law and
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Scarborough, N. M., 2016. Essentials of entrepreneurship and small business management.
Pearson.
Scholes, M. S., 2015. Taxes and business strategy. Prentice Hall.
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John Wiley & Sons.
Storey, D. J., 2016. Understanding the small business sector. Routledge.
Van Der Aalst, W. M., La Rosa, M. and Santoro, F. M., 2016. Business process management.
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