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budgeting for small and large organizations

1. Explain how both small and large organizations can benefit from budgeting.

2. Explain why a company can show it has a substantial amount of revenue and yet not able to pay its current liabilities?

3. Have you been directly or indirectly involved in a budgeting process? Briefly describe the process that you have been involved in?

4. "I do not care to prepare the annual department budget because whatever amount I submitted will be reduced." Do you agree with such a remark?

5. In your opinion what impact does an unrealistic budget (for example not enough budget money) has on the performance and morale of your department/yourself?

Solution Preview

1. Budgeting is extremely important for both small and large organizations because it helps an organization in understanding its financial needs in the coming period and thus, helps in efficient allocations of limited financial resources in the best possible manner. Budgeting ensures that an organization does not face shortage of funds for its growth in the coming period and helps in planning for funding needs in advance. Budgeting acts as a control mechanism as well for the management. Small firms that have limited ...

Solution Summary

1. Explain how both small and large organizations can benefit from budgeting.

2. Explain why a company can show it has a substantial amount of revenue and yet not able to pay its current liabilities?

3. Have you been directly or indirectly involved in a budgeting process? Briefly describe the process that you have been involved in?

4. "I do not care to prepare the annual department budget because whatever amount I submitted will be reduced." Do you agree with such a remark?

5. In your opinion what impact does an unrealistic budget (for example not enough budget money) has on the performance and morale of your department/yourself?

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