COMM 305 Chapter Notes - Chapter 10: Budget, Main Source, Indian Railways
29 Mar 2017
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Budget - formal written statement, in financial terms, of management"s plans for a specified future time period. Essentials of effective budgeting: sound organizational structure that clearly defines authority and. Most common budget period is one year. Most companies use continuous 12-month budgets (drop month just ended and add future month, which keeps mgmt planning ahead) Bud. dev. for coming year usually starts many months before current year end. Usually begins with collection of data from each organizational comp. unit. Past performance often starting point for setting future bud. goals. Bud. developed within framework of sales forecast - projection of potential sales for industry and company"s expected share of these shares. Various factors considered: industry trends: general economic conditions. 2: market research studies, anticipated advertising and promotion, previous market share, changes in prices, technological developments. Budget committee - group responsible for coordinating preparation of budget.
