Setting Budgets

Beschreibung

A Levels Business Studies (AQA AS BUSS1) Mindmap am Setting Budgets, erstellt von lj.willis am 09/04/2014.
lj.willis
Mindmap von lj.willis, aktualisiert more than 1 year ago
lj.willis
Erstellt von lj.willis vor mehr als 10 Jahre
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Zusammenfassung der Ressource

Setting Budgets
  1. Budget = A target amount of money set by a business in a specific period of time
    1. Income Budget = A target amount of money to be recieved from sales in a given period of time; this can be set for the business as a whole or specific activity e.g. each store or product
      1. May be translated into individual sales targets for staff
        1. Informed by market research and sales forecasts
          1. Informs cash inflows in the cash flow forecast
          2. Expenditure Budget = A target amount of money a business is permitted to spend in a given period of time; this can be set for specific aspects of business activity e.g. marketing, materials or wages
            1. A seperate expenditure budget may be set for running costs and start up costs
              1. Informs cash outflows in the cash flow forecast
                1. Allows for monitoring of underspending as well as overspending
                2. Profit Budget = A target amount of profit to be achieved by a business in a specific period of time, calculated based on income budget minus the expenditure budget
                  1. May be set for the business as a whole or for individual departments, products or branches
                    1. Within a business plan will be used to highlight the potential and feasibility of the business
                    2. Reasons for setting a budget include:
                      1. Important part of a business plan
                        1. Motivates to meet targets
                          1. Helps avoid overspending
                            1. Encourages efficiency
                              1. Shares responsibility
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