Ethical Considerations. Budget projections always involve a degree of judgment because managers can neverpredict the future with total accuracy. For instance, onemanager with an optimistic view and another with apessimistic view could look at the same set of facts andarrive at distinctly different conclusions about the company’s financial prospects. When budgets will influencedecisions made by investors or lenders, how should thepeople who prepare the budgets deal with the variancebetween optimistic and pessimistic viewpoints? On theone hand, being too pessimistic could result in lowerlevels of funding, which could be detrimental to employees, existing investors, existing creditors, and otherfinancial stakeholders. On the other hand, being toooptimistic could be detrimental to prospective investors or creditors. How do you find the right balance?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Ethical Considerations. Budget projections always involve a degree of judgment because managers can never
predict the future with total accuracy. For instance, one
manager with an optimistic view and another with a
pessimistic view could look at the same set of facts and
arrive at distinctly different conclusions about the company’s financial prospects. When budgets will influence
decisions made by investors or lenders, how should the
people who prepare the budgets deal with the variance
between optimistic and pessimistic viewpoints? On the
one hand, being too pessimistic could result in lower
levels of funding, which could be detrimental to employees, existing investors, existing creditors, and other
financial stakeholders. On the other hand, being too
optimistic could be detrimental to prospective investors or creditors. How do you find the right balance?
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