FINC 577 Chapter 9 Notes Outline

Most common one year long enough to provide an

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Unformatted text preview: time. Most common - one year. Long enough to provide an attainable goal and minimize ___________________fluctuations. Short enough for reliable estimates. Continuous twelve-month budget . twelve- Drop the month just ended and add a future month. Keeps management planning a full year ahead. Chapter 9-6 The The Budgeting Process Base budget goals on past performance Develop budget within the framework of a _______________________. Chapter 9-7 The Budgeting Process Factors considered in Sales Forecasting: 1. 2. Industry trends. 3. Market research studies. 4. Anticipated advertising and promotion. 5. Previous market share. 6. Price changes. 7. Chapter 9-8 General economic conditions. Technological developments. Budgeting Budgeting and Human Behavior Participative Budgeting. Invite each level of management to participate. This “bottom-to-top” approach is called “bottom-toParticipative Budgeting. Chapter 9-9 Participative Budgeting Flow of budget data from lower management to top levels. Chapter 9-10 Participative Participative Budgeting Advantages: More __________________________because lower lower level managers have more detailed knowledge of their area. Tendency to perceive __________________ due due to involvement of lower level management. Overall goal - produce a budget considered fair and achievable achievable by managers while still meeting corporate goals. goals. Risk of...
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