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Besides using budgets to calculate capital requirement it is also expedient
to make budgets to foresee financial effects from the start-up as well as the
operation.
Optimistic budget
You can make an “optimistic” budget – i.e. a budget in which the start is
estimated to be better than anticipated – and you will gain turnover/sales
exceeding your expectations.
Pessimistic budget
Likewise, a “pessimistic” budget takes a slower than anticipated start-up phase
into account.
In both cases it is interesting to look in detail at the effects on cash flow,
capacity, physical frames of the business as well as other areas affected by
changes in the expected position.
Monitoring your business
By making various alternative budgets you will, to a larger extent, be able to
control the financial development of your company.
You can constantly monitor if things go as planned, whether you are over or
under the budgets you have worked out. Thus, you get a warning to act, make
decisions or take new initiatives in response to the new financial situation.
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| DEVENDRA KUMAR, INDIA |
04-05-2011 |
I want to know how to calculate the operation and maintenance budget for construction machinery in any construction company.Please give me some tips.
| azeb teferi, ethiopia |
31-03-2011 |
dear sir how are you?thanks to god i am fine.but have no experience for budget.but i have one quastion my quasetion is how to pipar budget plan?
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