JET2 Task 2 Summary Report For Competition Bikes

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Financial Analysis JET2 Task 2 Karen Hatfield Summary Report for Competition Bikes Budget Concerns A budget is “a set of interlinked plans that quantitatively describe an entity’s projected future operations” (Budget, 2014). A company utilizes a budget to gauge in which to assess the actual working outcomes. This helps with the allocation of funding and to plan future operations of the company. The process of budgeting in a company originates with a strategy planning meeting by upper executives. The executives team decides a direction in which the company will place into a master budget. This new budget will include the sales, production, materials, labor as well as administrative, fixed assets and overhead. The budget will also show the current income statement, balance sheet and forecast of cash utilized. The goal of having a budget is that it allows for improvement in efficiency, assignment of responsibility, providing direction for the company, and helps the company plan and controls its financial status. Budgetary Concerns for Competition Bikes There are several areas of concern…show more content…
Operating expenses- total operating expenses had declined in period 8 of $1,273,867 and have had a projection n the budget for period 9 of $1,026,483. This is unrealistic due to the fact that sales were anticipated to increase. The utilities and services have also been duplicated within the budget for operating expenses. It is listed under Facility/General operations cost then under expense. This duplication should be deleted as it is not necessary. It is evident is that they have incorporated into their budget $150,000 for utilities during period 9. This is the same amount that was allocated during period 8. During period 7 CBI only utilized $135,000 on their utilities. During this period the production was at 4000 compared to 3400 the next year. CBI needs to reconsider the amount they have allotted for the budget because the prediction for sales is less than period

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