Acct 270 case#3

Acct 270 case#3 - 1. What motivates PFG to install a...

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1. What motivates PFG to install a budgeting and planning system? The motivation for budgeting came jointly from its PFG’s bankers, its board of directors, and its management. The information needs for all three users were similar. All three were interested in cash flow projections and future earnings potential. The board was interested in improving PFG’s return on equity (ROE), and it wanted to analyze the prospects of reinstituting a common stock dividend. In addition, management wanted to segment P&L’s and improved departmental expense and cash flow tracking. PFG’s segments are regions, lines of business (utility, propane, and merchandise, and type of customer commercial , industrial, and residential) 2. Why is flexibility very important for PFG’s budgeting system to be effective Budgeting must be flexible, especially for natural gas and propane, because a significant amount of demand for these projects is dependent on Mother Nature. For example, in 1994 Pennsylvania had its coldest, iciest winter in history, but in 1995 it had one of its warmest. PFG
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This note was uploaded on 09/15/2009 for the course ACCT 270 taught by Professor Waite during the Fall '09 term at SUNY Geneseo.

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Acct 270 case#3 - 1. What motivates PFG to install a...

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