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You are here: HomeCase StudyAccounting, Finance, SPSS
Pages:
5 pages/≈1375 words
Sources:
9 Sources
Level:
APA
Subject:
Accounting, Finance, SPSS
Type:
Case Study
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 23.4
Topic:

How The Firms Should Allocate Their Revenues And Expenditures? (Case Study Sample)

Instructions:

whether the LONG-TERM STRATEGY that The board of directors ADOPTED would maximize the value of the shareholders' investment using the financial objectives that they ESTABLISHED.

source..
Content:


Organic Foods Ltd
Name:
Institutional Affiliation:
Organic Foods Ltd
Table of Contents
Cover Page……………………………………………………………………………………….1
Table of Contents………………………………………………………………………..……….2
Executive Summary………………………………………………………………………...…….3
Introduction……………………………………………………………………………..………..3
The Role of Budgeting Process at Organic Foods Ltd and how it Relates to the Strategic Planning Process…………………………………………………………………....……………..3
Whether or not John Winslow’s Budget Attains each of the Financial Objectives……………....5
Increase Sales by 12 Percent per Year……………………………………..……………………..5
Increase Profit before Taxes by 15 Percent per Year……………………………………………..6
Maintain Long-Term Debt at a Maximum of 16 Percent of Assets………………………….…..6
Maintain Cost of Goods Sold at a Maximum of 70 Percent of Sales………………………...…..7
Whether or not the Adjustments Contemplated by John Winslow are Unethical………………..7
Conclusion………………………………………………………………………..……..………..8
References……………………………………………..………………………………..………..9
Executive Summary
The budgets are essential in estimating how the firms should allocate their revenues and expenditures as the firms look at their financial requirements in the future. The budgets help the organizations to make plans depending on how much income, costs, and the cash flows that they expect. Hence, the budgets help the businesses to support their strategic plans, set their priorities right, and to make sure that their employees work towards the set goals. In addition, the budget helps to point at the financial consequences of the organizations’ plans and defines the resources that the firms require to attain those plans. The budgets also offer a way in which the managers measure, view, and control the results that the firm obtains as compared to their plans.
Introduction
Budgets are the estimates of all the revenues and expenditures, which assist companies to find out the future financial requirements, hence, make plans depending on the income, costs, and cash flow that they expect. The corporations that lack or do not prepare budgets to support their strategic plans should come up with other financial methods that would help them to support their plans. Burtonshaw-Gunn (2017) asserts that firms use budgets as the management control tools to help the managers make sure that the corporations obtain and use their resources in an efficient and effective manner. Budgets help the managers to achieve the institutions’ objectives. In addition, the budgets offer the direction that the firm should follow as they quantify the objectives of the managers. Managers complete making the budgets with each of them having defined targets to aim, hence, commit their energy towards achieving the goals.
The Role of Budgeting Process at Organic Foods Ltd and how it Relates to the Strategic Planning Process
The budgeting process at Organic Foods Ltd helps it to estimate all its revenue and expenditures, and find out its future financial requirements, hence, make its plans based on the cash flow, expenditures, and profits that the firm expects. According to Ji (2017), businesses should develop the budgets in order to support their strategic plans. Managers at Organic Foods Ltd should use strategic planning to help them in the setting of priorities, focus the various resources while strengthening operations, and make sure that staffs work towards the objectives of the company. According to Wolf and Floyd (2017), a firm can use one of the various available strategic planning methods. One of the approaches that Organic Foods Ltd can use is to strategically analyze where the institution is today, comprising its economic environment, strengths, and weaknesses. These factors are the ones that helped the president of Organic Foods, Andrea Donis, together with the board of directors to choose the direction that the corporation needs to go and set the goals then asked John Winslow, the management accountant to find out the tactics to attain those objectives through the Company’s budgeting process.
Organic Foods Ltd requires financial budgets because they inform how the corporation will acquire and expend money in the future. The firm uses the budgeted income statement and budgeted balance sheet as its financial budgets. The balance sheet shows the level of long-term debt while the income statement shows sales, profit before taxes, and the cost of goods sold that help the firm to make decisions on how to achieve its financial objective. Each component in the financial budget comes from operational budgets such as the Sales budget, and Selling and administrative budgets. According to Buse, Bernstein, and Bilimoria (2016), an operational budget is essential because it helps the corporation to know the unit cost of every product that t...

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