1. Explain the nature of budgets and their use in the long-term planning and strategy of an organisation.
Draw an overview diagram of the budgeting process and of budgets drawn-up by an organisation and explain how individual budgets interact with one another.
Explain the different approaches to drawing-up budgets.
(40 Marks)
2. Use an example of cash budgeting and explain how it is calculated and how a business benefits from producing a cash flow.
(20 Marks)
3. Obtain a set of PLC accounts and calculate the Net profit percentage and the return on capital employed percentage. Explain what these ratios say about the company
Take a brief look at the chairman’s statement (or directors report or financial review) and briefly explain what is being said about the company’s performance. (You should summarise what these reports say)
(40 marks)