Budgeting Concepts, Policy, Process and Beyond
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Budgeting Concepts, Policy, Process and Beyond

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  • Engage participants in a discussion about their budgeting process and how their plans currently flow and should flow.
  • Ask the attendees to calculate the ratios based on the sample balance sheet provided before.Current Ratio= 2.6Quick Ratio= 1.5
  • Ask the attendees to calculate the ratios based on the sample balance sheet provided before.Debt Ratio= 39%Gross Profit Margin= 68%
  • Ask the attendees to calculate the ratios based on the sample balance sheet provided before.Return on Sales Ratio= 48%Debt to Net Worth Ratio= 64% (high debt to net worth ratio may indicate that the business is overly burdened by interest payments and hampered in its ability to borrow any additional funds which may be necessary. Too low a ratio, however, may indicate that a business is too conservative and could effectively borrow more money to generate more profits. A ratio higher than 1 indicates too much debt for net worth)
  • Ask the attendees to calculate the ratios based on the sample balance sheet provided before.Cash Turnover Ratio= 3 (22000/11500-4500) Cash Turnover Ratio provides an indication of how often cash flow turns over to finance your sales.Collection Ratio= 124 days (The period should be no more than 1.5 times your credit overdue period)
  • Ask the attendees to calculate the ratios based on the sample balance sheet provided before.Return on Investment= 1.5 or 150%

Budgeting Concepts, Policy, Process and Beyond Budgeting Concepts, Policy, Process and Beyond Presentation Transcript

  • Budgeting Concepts, Policy, Process andBeyond - Session ONE
  • Section 1 – Budgeting Concepts PageBudgeting VS. Accounting 4Budget Definition 5Advantages of Budgeting 6Disadvantages of Budgeting 7Uses of Budget 8Why Plan? 9Understanding Where Your Budget Fits In 10Why Budget? 11Decision Making 12Budget Committee Decision 19Budget Period Decision 20Parts of a Budget 21Types of Budgets 22Ratio Analysis 29Budgeting Tips and Tricks 36
  • Understanding Where Your Budget Fits InYour budget should flow down from your company’s plan, like this:
  • Types of Budgets Capital Budget Sales Cash Budget Budget Main Types of BudgetProduction Expense Budget Budget Labor Budget
  • Ratio Analysis (3/7)Current RatioQuick Ratio
  • Ratio Analysis (4/7)Debt Ratio Gross Profit Margin
  • Ratio Analysis (5/7)Return on Sales Ratio Debt to Net Worth Ratio
  • Ratio Analysis (6/7)Cash Turnover RatioCollection Ratio
  • Ratio Analysis (7/7)Return on Investment
  • Section 2 – Budgeting Policies and Procedures PageBudgeting Procedures - Intro 40Formulation of the Budget 41Budget Variance Reports 47Subsequent Account Changes 49Budgeting Tips and Tricks 52
  • Section 3– Budgeting Process PageDefinition Of Budgeting Process 55The 6 Steps Of a Budgeting Process 56Where Can You Get your Numbers From? 71Getting Your Budget Approved 74Monitoring and Managing Budgets 75Budgeting Tips and Tricks 77
  • The 6 Steps Of a Budgeting ProcessThe budgeting process typically has six steps.
  • Thank You For Coming Today! Facilitator: Antoine TabbakhTel: +961 1 385 825 / website: www.bsf-lb.com Email: info@bsf-lb.com/BestSolutionFinance Company/bsf #bsfbeirut