Week 5 Overview

Budgets & Budgeting

Welcome to the fourth week of BUSN 5200: Basic Finance for Managers. This week we turn our attention away from financial statements and focus on budgets and budgeting.

What Are Budgets?
Budgets are formal written statements of management's plans for the future expressed in financial terms. In other words, budgets are plans expressed in financial terms.

Why Study Budgets?
Budgets assist managers in their efforts to:

• Control finances
• Meet current commitments
• Provide funding for future ventures, and
• Make financial decisions and meet organizational goals.

Therefore, as managers, it is important for you to know about budgets. This week we will also continue our discussion of the Case Study of our Chosen Company. This week you will practice the techniques you learned in last week's lesson by conducting a ratio analysis of our Chosen Company.

Objectives

By the end of this week, students will be expected to:

• Define budgeting
• Describe the budgeting process
• Identify the different types of budgets
• Prepare a simple budget