Budgeting a la Carte

"The budget should be budgeted."

"Budgeting consists of separate elements, procedures, techniques, and purposes."

"Quite simply every business has to know how it's doing and where it stands financially."

"The income statement naturally occupies center stage."

"The internal profit report, or management income statement, is classified quite differently from the externally reported income statement and presents new and very important information."

"Managers should know which particular operating assets and liabilities are needed."

"The cash flow statement is in three parts, because there are three main types of cash flows through a business."

"Without these essential benchmark ratios, it is very difficult to analyze the profit performance, financial condition, and cash flow effect of decisions."

"Every business is under pressure to meet minimum benchmark performance ratios for profit and return on capital."

"Business capital investment performance evaluation uses two fundamental Return on Investment ratios: 1. return on assets; and, 2. return on equity."

"Managers should keep a close and careful eye on how much the financial leverage factor contributes to net income and Return on Equity."

"Book value of equity is used for calculating Return On Equity."

"It goes without saying that the future numbers in a budget can turn out to be wrong, almost assuredly so!"

"Management control is an information dependent process."

"All profit factors are subject to change because of external changes beyond the control of the business and changes initiated by the managers themselves."

"Setting sales prices is one of the most perplexing decisions facing business managers."

"One basic function of business managers, which is not often stressed, is to raise sales prices in an effort to pass along to customers increases in product costs and operating expenses caused by inflation."

"In making long-term capital investment decisions, managers should look at how the new assets blend into the present mix of operating assets."