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    5 Types of Budgets For Businesses

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    Johh Paul Garlitos
    The document discusses 5 types of budgets that are commonly used by businesses: 1) A master budget combines individual budgets to present a complete picture of a company's financial health and performance. 2) An operating budget forecasts income and expenses over a specified time period like monthly or yearly. 3) A cash flow budget projects when cash comes in and out to determine if a company has enough cash flow. 4) A financial budget establishes a company's financial strategy to manage assets, cash flow, income and expenses. 5) A static budget remains fixed regardless of changes in factors like sales volume.

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    5 Types of Budgets For Businesses

    Uploaded by

    Johh Paul Garlitos
    200 views2 pages
    The document discusses 5 types of budgets that are commonly used by businesses: 1) A master budget combines individual budgets to present a complete picture of a company's financial health and performance. 2) An operating budget forecasts income and expenses over a specified time period like monthly or yearly. 3) A cash flow budget projects when cash comes in and out to determine if a company has enough cash flow. 4) A financial budget establishes a company's financial strategy to manage assets, cash flow, income and expenses. 5) A static budget remains fixed regardless of changes in factors like sales volume.

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    5 Types of Budgets for Businesses

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    The document discusses 5 types of budgets that are commonly used by businesses: 1) A master budget combines individual budgets to present a complete picture of a company's financial health and performance. 2) An operating budget forecasts income and expenses over a specified time period like monthly or yearly. 3) A cash flow budget projects when cash comes in and out to determine if a company has enough cash flow. 4) A financial budget establishes a company's financial strategy to manage assets, cash flow, income and expenses. 5) A static budget remains fixed regardless of changes in factors like sales volume.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    200 views2 pages

    5 Types of Budgets For Businesses

    Uploaded by

    Johh Paul Garlitos
    The document discusses 5 types of budgets that are commonly used by businesses: 1) A master budget combines individual budgets to present a complete picture of a company's financial health and performance. 2) An operating budget forecasts income and expenses over a specified time period like monthly or yearly. 3) A cash flow budget projects when cash comes in and out to determine if a company has enough cash flow. 4) A financial budget establishes a company's financial strategy to manage assets, cash flow, income and expenses. 5) A static budget remains fixed regardless of changes in factors like sales volume.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    5 Types of Budgets for

    Businesses
    There are many different types of budgets. Can you name 5?
    Budgets help businesses track and manage their resources. Businesses use a variety
    of budgets to measure their spending and develop effective strategies for maximizing
    their assets and revenues. The following types of budgets are commonly used by
    businesses:
    Master Budget
    A master budget is an aggregate of a company's individual budgets designed to present
    a complete picture of its financial activity and health. The master budget combines
    factors like sales, operating expenses, assets, and income streams to allow companies
    to establish goals and evaluate their overall performance, as well as that of individual
    cost centers within the organization. Master budgets are often used in larger companies
    to keep all individual managers aligned.
    Operating Budget
    An operating budget is a forecast and analysis of projected income and expenses over
    the course of a specified time period. To create an accurate picture, operating budgets
    must account for factors such as sales, production, labor costs, materials costs,
    overhead, manufacturing costs, and administrative expenses. Operating budgets are
    generally created on a weekly, monthly, or yearly basis. A manager might compare
    these reports month after month to see if a company is overspending on supplies.
    Cash Flow Budget
    A cash flow budget is a means of projecting how and when cash comes in and flows out
    of a business within a specified time period. It can be useful in helping a company
    determine whether it's managing its cash wisely. Cash flow budgets consider factors
    such as accounts payable and accounts receivable to assess whether a company has
    ample cash on hand to continue operating, the extent to which it is using its cash
    productively, and its likelihood of generating cash in the near future. A construction
    company, for example, might use its cash flow budget to determine whether it can start
    a new building project before getting paid for the work it has in progress.
    Financial Budget
    A financial budget presents a company's strategy for managing its assets, cash flow,
    income, and expenses. A financial budget is used to establish a picture of a company's
    financial health and present a comprehensive overview of its spending relative to
    revenues from core operations. A software company, for instance, might use its
    financial budget to determine its value in the context of a public stock offering or merger.
    Static Budget
    A static budget is a fixed budget that remains unaltered regardless of changes in factors
    such as sales volume or revenue. A plumbing supply company, for example, might have
    a static budget in place each year for warehousing and storage, regardless of how
    much inventory it moves in and out due to increased or decreased sales.
    https://www.fool.com/knowledge-center/5-types-of-budgets-for-businesses.aspx

    http://www.yourarticlelibrary.com/organization/budgetary-control/budgetary-control-meaning-
    objectives-and-essentials53355

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