Assignment Wk 5 (Autosaved).docx

Reference issues in budgeting and control 2011

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Reference Issues in budgeting and control . (2011). Retrieved from John Wiley & Sons Web site: http://media.wiley.com/product_data/excerpt/9X/04712300/047123009X.pdf A basic checklist for managers to ensure proper control should include the following tasks ("Controlling a budget," 2001): Understand the overall budget: line items, amounts, bottom line, etc. Request and review budget reports monthly Communicate with accounts department regularly (ask questions, assess data, etc.) Establish and follow a monitoring and early detection system for the company at appropriate times (weekly, monthly or quarterly) Identify and assess variances and problem areas. Revise the budget as necessary offering corrective measures. Be transparent and share with the appropriate staff. Reference
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Controlling a budget. (2001). Annual , Retrieved from http://www.entrepreneur.com/tradejournals/article/100012296.html Best Practices in Budget Monitoring Communicate up the management ladder, down the management ladder and across all departments. Act in a timely fashion. Monitor consistently and at regular intervals. Budget Monitoring Pitfalls Being hasty and acting without proper research and communication with others Working alone; always involve the help of your staff or department Ignoring or hiding the problems; they will not go away Business Investment Risks by Osmond Vitez, Demand Media Making business investments usually carries different risks. Two types of risk found in the economic marketplace are systematic and non-systematic risk. Systematic risk is also known as market risk; it includes the risk involved in the overall economy or investment market. Non- systematic risk usually relates to a single company or a single type of investment. Different types of risks affect how business owners approach investment decisions. Ads by Google Open your Saladbar Green 100% autonomy in your business Become a Green Partner today here ! www.greenbusinessonly.com
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Interest Rate Risk Interest rate risk occurs when changes in the overall economic market affect specific types of investments. This type of risk commonly affects the bond market. As interest rates increase, new bonds must be issued with higher interest rates to attract investors. This drives down the value of old bonds issued at lower interest rates. The opposite occurs when interest rates lower in the overall bond market. Inflation Risk Inflation occurs in an economy when too many dollars are chasing too few goods. Rising economic inflation reduces the purchasing power of an investor’s dollar. Not only can investors purchase fewer investments, investors will also face lower returns on current investments as inflation eats away at the overall return percentage of investments. To offset inflation risk, investors will demand higher interest rates, which may create an imbalance in the investment market.
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