2. Section 1 – Budgeting Concepts Page
Budgeting VS. Accounting 4
Budget Definition 5
Advantages of Budgeting 6
Disadvantages of Budgeting 7
Uses of Budget 8
Why Plan? 9
Understanding Where Your Budget Fits In 10
Why Budget? 11
Decision Making 12
Budget Committee Decision 19
Budget Period Decision 20
Parts of a Budget 21
Types of Budgets 22
Ratio Analysis 29
Budgeting Tips and Tricks 36
3. Understanding Where Your Budget Fits In
Your budget should flow down from your company’s plan, like this:
4. Types of Budgets
Capital
Budget
Sales Cash
Budget Budget
Main Types of
Budget
Production Expense
Budget Budget
Labor
Budget
10. Section 2 – Budgeting Policies and Procedures Page
Budgeting Procedures - Intro 40
Formulation of the Budget 41
Budget Variance Reports 47
Subsequent Account Changes 49
Budgeting Tips and Tricks 52
11. Section 3– Budgeting Process Page
Definition Of Budgeting Process 55
The 6 Steps Of a Budgeting Process 56
Where Can You Get your Numbers From? 71
Getting Your Budget Approved 74
Monitoring and Managing Budgets 75
Budgeting Tips and Tricks 77
12. The 6 Steps Of a Budgeting Process
The budgeting process typically has six steps.
13. Thank You For Coming Today!
Facilitator: Antoine Tabbakh
Tel: +961 1 385 825 / website: www.bsf-lb.com
Email: info@bsf-lb.com
/BestSolutionFinance Company/bsf #bsfbeirut
Editor's Notes
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%
