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Budgeting

Budgeting. Budgets must be made compatible with a business’s strategic objectives. Steps to create a budget comprise…. Long-Term (5 yr.s ?). Short-Term (1 yr.?).

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Budgeting

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  1. Budgeting

  2. Budgets must be made compatible with a business’s strategic objectives. Steps to create a budget comprise…

  3. Long-Term (5 yr.s?) Short-Term (1 yr.?)

  4. Budgets convert strategic plans into short-term, actionable blueprints, and are usually expressed in financial terms. Budget targets would include things like….

  5. Issues in Budgeting

  6. Inter-relationship between different budgets and business activities (in a manufacturing business)

  7. Sometimes, things other than sales (e.g. production capacity) can be the limiting factor.

  8. It is also possible to have subsidiary, “vertical” budgets

  9. How budgets help managers

  10. Formally establishing a budget

  11. Often a Budget Committee is established to set the budgets, and a Budget Officer (often an accountant) is assigned to carry out the budgeting assignments.

  12. Incremental vs. Zero-Based Budgeting

  13. Continued next slide…..

  14. Next lecture: Budget preparation.

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