2) Capital expenditure budgetĪ capital expenditure budget is a forecast of any planned future capital expenditures of a business. ![]() Once the business prepares these two budgets, it can formulate a budgeted balance sheet which is also a part of the financial budget. The financial budget of business mainly comprises a capital expenditures budget and a cash budget. A business prepares a financial budget after obtaining these figures from its operating budget. ![]() This is because a financial budget requires certain information from the operating budget, for example, information regarding the forecasted sales, production costs, etc. A business must first prepare an operating budget before preparing a financial budget. 1) Financial BudgetĪ financial budget is a budget that is used by businesses to determine both the long-term and short-term incomes and expenses of a business.įinancial budgets are also made by a business to forecast its future position. One particular type of budget that is used by businesses is known as a financial budget. For example, businesses use incremental budgets, zero-based budgets, imposed budgets, participative budgets, operating budgets, etc. ![]() There are many types of budgets that can be used by businesses. Businesses use budgets as a monitor and control tool to control their actual performance according to the set budget. A budget is a quantitative plan or forecast for the future of a business in which the business allocates its resources to different departments or activities.īusinesses mostly use budgets to plan for the future.
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