The document provides a brief overview of the components and significance of an annual budget, highlighting its types including operating and capital budgets. It details budget allocation with 75% for operating expenses and 25% for capital investments, while also listing various cost components. Additionally, it emphasizes the strategic role of a budget in aligning with the company's five-year objectives.

1. The page covers the brief overview of components and importance of annual
budget. Key points covered in the slide includes type of annual budget,
components of operating budget, importance of budget, budget stats etc.
Summary Page of Annual Budget Components & Importance
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COMPANY NAME
Budget Stats
Total Budget: $ 200 MM
Operating Budget
75%
Capital Budget
25%
Manufacturing
30%
Marketing
20%
IT (Research)
10%
Marketing
15%
Importance of Budget
Strategic Plan
Business
Plan
Budget
Now
5 Years
objectives
Where
we are
Where we
want be
Type of Annual Budget
Operating Budget
• It comprises the expenses
related to daily business
functions
• The company’s 75% expenses
are related operating expenses
Capital Budget
• It comprises the expenses
related to company’s long-term
investments (fixed asset
purchase)
• The company’s 25% expenses
are related operating expenses
Cash Budget
• Cash budget is related to
estimated projection of the
company's cash position in the
future
• Add text here
Components of
Operating Budget
Revenue
• Volume
• Price
• Text
• Text
• Text
Variable Costs
• COGS
• Direct Selling Cost
• Direct Labour
• Freight
• Sales commissions
Fixed Costs
• Rent
• Head Office
• Insurance
• Salaries
• Utilities
Non-cash Expenses
• Depreciation
• Amortization
Such expenses don’t
impact cash flows, but
they will impact financial
reporting performance
Non-operating Expenses
Expenses that fall below
Earnings Before Interest
and Taxes (EBIT)
• Interest
• Gains or Losses
• Taxes
• Text