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    Manage Budget And Forecast Assignment Help

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    Manage Budget And Forecast Assignment Help


    Introduction:
    Preparation of budget and cash flow is important to determine the profit of a company in future. In the study, the definition of budget and its differentiation with the cash and expenditure are mentioned in the study. The calculation of sales budget, capital budget and expense budget of different companies are calculated in the study. Presentation of graph ion the basis of calculated cash flow is also mentioned in the study. Calculation of financial position of a company is also calculated in the study.
     
    1.1. Define budgets. Differentiate between cash, revenue and expenditure
    According to Hutchings et al. (2014), a financial statement that is created for predicting future loss or profit of a company regarding the business activities is called budget. Budget also helps in differentiating what was predicted and what has happened in the financial activities in real for the company.
    Sales is regarded as revenue for the company and cash receipts is said to be the cash balance of the company which helps in continuing day to day business activities of the company. Expenditures are important such as salaries and wages, advertisement, purchase of raw material that are important for a company to incur to bring revenue to the company.

    1.2 Define the following:
    Fixed Budget
    According to Van Auken & Carraher (2013), the budget that is created by considering that there will be no change in the expenses of the company in spite of increase and decrease of sales is called fixed budget.

    Flexible Budget
    As per Hoiles & Krishnamurthy (2015) the budget that is created by considering that there will be change in the expenses of the company due to increase and decrease of sales and also other expenses is called flexible budget.

    Breakeven point
    As per Rydholm & Luhr (2014) the point where the profit and the expenditure meets and creates a Zero value for the profit of the company is called breakeven point.

    Types of budget
    Operating, static, financial and cash flow are the main 4 types of budget that is used by the Australian companies in predicting profit and loss of the company.

    1.3 How budget affects a company and how the limitation of budget can be countered?
    Summers (2016) said that budget is a very important predicting tool that financially reflects the future results of the company on the basis of present condition. There are also certain limitations that are associated with the budget which are as follows;
    Lack of proper selection of budget type is a limitation of budget
    Understanding the current situation and on that basis preparing the budget is also one of the most important limitation.
    Budget by less experienced personnel brings a wrong predicted result in the budget for a company. Well-experienced personnel are required for preparing budget.
    Prediction of future situation that may happen in the economy and preparing on that basis is also an important limitation that a company faces in the time of preparing budget. Proper prediction by managerial officials is required for preparing budget.

    1.4 Role and functions of budget
    Plan future expenditure
    According to Zeller & Metzger (2013), an important role of budget is to plan future expenditure of a company. Future expenditure prediction is done on the basis of present financial status of the company and also the future expenditure clears the profit or loss that the company au ace for spending more or less.

    Predicting future success of a company
    Gane et al. (2014) said that future success of the company is based on mainly the budget that is prepared. Actually, budget is the tool that created the way by which the company can move to meet its objective. However, inefficient budget preparation may bring loss to the company in future also.

    Track variances in spending
    Tracking the spending variances for the future is an affecting function of budget is, it help in finding out the variances or the changes that happened between budget and real financial activities of a company.

    Performance report information
    The budget helps in getting performance report on the basis of the budget made by the company. Monitoring of activities and finding loopholes is also dined, as budget of the company is prepared earlier.

    1.5 List five controls that could be used to monitor an organisation’s budget. Discuss variance analysis.
    1. Reporting and continuous monitoring the activities of a company so that it can be assessed whether the company is moving towards its objective or not (Hoiles & Krishnamurthy, 2015).
    2. Continuous revising the internal budget for finding any loopholes in the budget or in company's activities
    3. Predicting the problems that the company many face in future for meeting its objective.
    4. Reviewing the expenses so that the expenses can be minimized as much as possible.
    5. Maintaining punctuality in the company activities so that the activities can move o smoothly without any obligation.
    As per De Marco, Rosso & Narbaev (2016) variance analysis is an important method of differentiating what company thought to do and what the company has done in reality. The analysis is mainly focuses on the changes that a company makes in its activities and also how it affect the profit of the company. More percentage of variance can bring obligations to the company and however, negative percentage can obstruct the company to reach its success point.

    1.6 List the steps associated with preparing and documenting the budget process 
    Updating assumptions of budget
    Reviewing each and every details of the present status of the company
    Availing findings that would help in making the budget
    Stepping the points that requires expenses
    Obtaining review forecast

    1.7. Explain why stakeholders are needed to get included in the budget
    As per Ajupov, Kurilova & Ivanov (2014) stakeholders are needed to get included into the budget as because the stakeholders will help to clarify the issues that will occur in the time of preparing budget. The stakeholders can help in making managerial professionals understand regarding other relevant factors that are needed to be included in the budget or accurate prediction of profit or losses of the company. 
    The employees, managerial staffs, customers, workers and the equity shareholders, dividend holders are the individual who are considered to be the stakeholders of the company and needs to be included in the time of preparing budget.

    1.8 Define and explain budget performance indicators?
    The indicators that indicates deviation in the projected and the actual cost of the budgeted expenses of a company is called budget performance indicator. This indicator is mainly used as a tool to differentiate between what the budget of the company says and what the actual amount of cost incurred by the company. This indicator is very much important as because it helps in making the company understand that how it needs to move in future so that the profit of a company can be maximized.

    1.9. Define cash flow risk? What are the reason behind the risk?
    De Marco, Rosso & Narbaev (2016, p.24) said that when the risk is created due to shortage in the cash balance in a company, it is called cash flow risk. The main reason behind that cash flow risk is increasing for cash expenses than the cash receipts by a company. The loss in the cash flow mainly faces the cash low risk, as cash flow is the only medium that can meet the day-to-day financial activities of the company.

    1.10 How to input budget timeline?
    According to Summers (2016), input budget timeline is the period of time that is mainly applied for preparing budget of a company. The main issue that gets associated with the preparation is proper timing of enlisting activities of future proceedings of a company being financial personnel. I would recommend reviewing the present financial status and its timing of happening for predicting cash expenses in the future.
     
    Assessment 2
     
    Q1 (refer to excel Q1)
    The financial personnel and the management personnel need to be discussed right now for the outcome of the budget to develop the activities of the company and quality of product A, B and C.

    Q2 (Refer to excel Q2)
    a. What type of business is this?
    This is a business that is said to be moderate and the budget is efficiently created for bring more revenue to the company

    b. What are the aims?
    The motion of the business is to meet the expenses of the budget and increase the sales of the budget so that the company can become more efficient in running business activities.

    c. if you were the manager with what would you be concerned about?
    Being a manager I need to be concerned of making the real expenses to match the budget expenses and increase the profit o the company.
    d. What recommendations would you make to the client?
    Minimisation of expenses is the recommendation that can bring more revenue to the company without increase in the sales of the company. However, recommendations can be also given so that the sales of the company can increase.

    Q3 (refer to excel Q3)
    Q4
    1 (refer to excel Q4)
    2. 
    The main two equations that is associated with the cash position is that the increase in the sales and lowering the expense. Rom the calculation it is found that the cash expenses is too much and  
    Huge amount of revenue is flooded for meeting expenditure. The managers needs to get concerned of minimizing the cash expenses of the company

    3. 
    In planning an action, plan only two major points’ needs to review. Increase and decrease of sales and expenses respectively are the main two items that needs to revalued as much as possible with the credited budget so that the expenses are minimized and revenue are maximised.

    Q5

    A (refer to excel Q5)
    B. 
    Expenditures are designed in such a way that it meets both the monthly and yearly expenses. However, the chances of minimization in the expenses are more than that of the yearly. The rent needs to be minimized and also other expenses so that it can bring more revenue to the company.

    C. 
    Depreciation, rent, payment of loan are the main verifiable expenses that are included in the calculation of cash flow. The data that is used is genuine and are crosschecked from the books of accounts before preparing cash flow statement.

    Q6 (refer to excel Q6)
    Q7 (refer to excel Q7)
     
    a. What type of business is this?
    This is a business that is said to be moderate and the budget is efficiently created for bring more revenue to the company

    b. What are the aims?
    The motion of the business is to meet the expenses of the budget and increase the sales of the budget so that the company can become more efficient in running business activities.

    c. if you were the manager with what would you be concerned about?
    Being a manager I need to be concerned of making the real expenses to match the budget expenses and increase the profit o the company.

    d. What recommendations would you make to the client?
    Minimisation of expenses is the recommendation that can bring more revenue to the company without increase in the sales of the company. However, recommendations can be also given so that the sales of the company can increase.
    Assessment 3

    A ( refer to excel QA)
    B ( refer to excel QB)
    C(refer to excel QC)

    D ( refer to excel QD)
     
    a. 
    September and December have the highest amounts to due to the expenses for motor, printing, electricity and rent.

    b. 
    The comments that can be given is that before purchasing capital item, the revenue needs to be determined which can be gained after using the capital items.
     
    c. 
    The purchase of car wills not much affect in the capital item as the car has been used purchased mainly for personal use.
     
    D. 
    April and June have the highest revenue.
     
    e. 
    In describing the position of closing stock, it needs to be mentioning that for the month of Apr-June the highest closing stock has been found. Therefore, strategies need to be developed so that the closing stock can decrease by the way of increasing the profit level of the company.

    QG 
    In the time of calculation of financial position many information has been found to be missing. Therefore, it needs to be mention that consideration of noncurrent asset, noncurrent and current liability more in number needs to be used for preparation of budget so that it can find out the accurate result of the financial, statement.
     
    Conclusion

    In the study, the budget of a company is prepared which depicts that the company is meeting the budgets as much as possible. It is found in the study that when a budget audit is done in a company, the budget audit reviews the budgets and the prediction power of the managers of a company before preparing a budget. It is found in the study that providing bonus to junior staffs important to motivate. However, it has been also found that the bonus needs to be given to the most efficient staffs of a company. The study also found that when a company finds percentage of variance, it means that there is a probability for loss of a company. On the other than the study also found that when the variance is negative, it creates obstruction in reaching to the objective of the company.  

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