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By: themindandbeauty
April 30, 2017

Budgeting Analysis

By: themindandbeauty
April 30, 2017
By: themindandbeauty
April 30, 2017


It is the budgeting which represents these resources providing investments and these investments consumed within organizations. It includes two ways; obtaining investments and using them. It is the budgeting which includes the destination of avenues and expenses. It represents two values; the plans and objectives. Budgeting standard; converting objectives to numbers. Budgeting content; the destination for the future attaining present. It provides information concerning planning analysis so, it is the role of the manager to analyze information regarding budgeting. It is the analysis which represents estimating production and changing decisions. After analyzing, it is forecasting which comes. Forecasting; planning! It is the forecasting process which the manager evaluates achieving objectives. It is the market share which exceeds the customer satisfaction. It exceeds the profit and value.

Planning tools:

Mission statements; objectives and roles. Mission statement; moral ethic and aim unity. It is the mission statement which represents the starting point of the planning process.  To make successful projects and programs, it is important to establish plans and strategies. It is normal to define budget as a tool which helps to make plans and strategies starting projects and programs. It includes different tools to achieve balance. Strategic objectives; market share.

Strategic objectives; leading market. It is important to have the whole congress between the strategic plans and operational ones. To establish objectives and strategies, it is essential to realize the available resources and potential dangers. It is the role of the manager to implement SWOT analysis before determining the strategies. To reach these strengths and weaknesses, it is the internal environment which the manager implements to recognize them.

Internal environment; requires analyzing. It is the internal environment which helps to identify the completive advantages which determine the market share which the organization can occupy. Competitive advantages; differentiate advantages and cost advantages. It is the source of the competitive advantages which includes the resources; representing the substantials such as share capital and assets and intangibles such as trademarks and patents, and capabilities representing the usage of resources through the strategic plans. Mission statements; the source for objectives. SWOT analysis; the source for the mission statements.

The external environment analysis; require analyzing. It is important to analyze the external environment to recognize the opportunities and limits. Control tool. When budgeting, it is important to lay a standard for performance. It is the benchmark which identifies the essential workstation. When finishing, it is the actual activity which appears after analyzing the performance and comparing its standard to the activity. Tracing plans; realizing variances. Reasons analysis; gap analysis. It is budgeting which includes tracking variances and deficiencies and correcting actions and paths. Evaluation tool. It is important to relate capability to performance. It is evaluated to reward remuneration considering performance.

Communication tools, sales managers; researchers, production managers; outputs. It is the inventory which determines units requiring checking purchases and materials. It is the raw material which identifies units. Motivational tool. It is motivational to allow the employees to realize the targets and observe them. It is reasonable to make the targets attainable to help the employees achieve them. Budget manual. Descriptive instructions. It is the budget which is a system requiring guidelines for preparing and operating.

Team lead; preparing a budget and finishing its process. It is the needed time to make a budget from beginning to end.

Distribution instructions; budget information: This information is inserted and interrelated. It is the distribution instructions which determine roles concerning which department will begin and which will fulfill.

Planning calendar: It is the planning calendar which is a private one designed specifically for the budget process. It includes dates concerning schedules including descriptions for the given information regarding transferring it among departments.

Participative budgeting; to help the employees realize that they enjoy such ownership. It is the role of the managers to lay the standards which represent the mission statement so; the lower can transform these general objectives into strategic plans. The departments’ managers estimate the objectives which can achieve these plans and deliver that to the budget committee. It is the budget committee which receives the working paper from different departments’ managers and reviews them.

Theoretical standards; efficient operations. It represents the best approach which makes the operation perform well.

Budgeting; future destination. It is the budget which represents the future destination for the definite activity. It is the tool which helps maintain the resources and invest them effectively and successfully. Activity-based budgeting processing; considers activities. It considers the activity rather than the project. It considers the cost of the activity rather than the output of the project. When tracing the direct costs and expenses, it is appropriate to use the activity-based costing and traditional one. When allocating the indirect costs and expenses, it is the traditional system which joins these expenses to represent a cost center distributing them using a certain method. Zero-based budgeting processing; preparing it. It represents the budget which lacks information to make its calculations from the zero base.

Operational budget; represents activities. Sales budget; the first preparation for the master budget. It is the sales budget which considers assumptions and tolerations. Its procession evaluates the sales forecast of units and money. Delta change affects the production budget. It is the delta change of the inventory which affects the production budget. It is the delta change which is considered the variance between the ending inventory and beginning one.

Financial Budget; financial statement: It includes the capital budget and cash budget. It represents these investments which include long term projects so; it plans these projects and controls them. It acquires assets merging them so, it must proceed the operational budget as it determines the production method used.

Cash budget; inputs steps from incoming statements and costs. It considers the cash received and cash paid and; it considers the projected cash collection schedules which are the destination and disbursements (which is the assumption).

Forecast; basis: It is the forecast which is considered the base of the plan. It is reasonable to make plans when accomplishing future events and expectations as well. It makes impressive conjunctions which help to determine the demand output and ratio.

Quantitative method; numerical method. It is the quantitative method which represents data analysis so; it includes the casual and time series analysis. It is the causal analysis which happens when observing effective causes among variances.

Correlation; variables. It determines the relation which represents two variables. It determines if their relation is strong and unified. When squaring the correlation, it represents the positive number. This value indicates the change which Y causes concerning the change which X causes explaining these changes.

Regression analysis; deriving the equation. It is the variable coefficient which represents the number of units concerning Y when changing a unit concerning X. To establish the equation and find a relation, it is necessary that the conditions and circumstances remain substantive. It assumes that the relation between X and Y remains linear.

Time series analysis; following data. Time series analysis; determining appropriate data for forecasting. It is the time which represents the independent agent. Cyclical fluctuation; periodical vacillation. It is the cyclical fluctuation which represents the general economy and concerns the crisis.

Seasonal variation; provisional industry. It is the seasonable variation which concerns the industry which varies in a timely manner. Smoothing technique; removing irregularity.

Learning curve; work experience. It is time; which workers require to produce units which decrease as there are additional units. These additional units which are produced suppose that time consumption decreases when producing the second unit provided that there is a duplication of the production. It is reasonable to realize that time which is required to produce units, decreases at a fixed rate when doubling the production of these units so, this fixed rate represents the learning curve.     

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