Question

How could managers use the annual report figures to measure budget control success?

Answer 1

The company's financial health is measured through its monthly, quarterly and annual reports. The annual report can provide the management detailed overview of the performance of the company from the previous year, and the reports on the budget can assist to know the details on how the performance fluctuated. Moreover the figures tell how the revenue changed over the course of the year, and these figures can be used to help the budget for the coming year. It laid a basis for budget control success as it allows making a comparison of the actual costs and revenues for a period with the budgeted costs and revenues thus depicts the different between the budgeted performance and the actual company performance. The annual report is a key tool as it helps the management to analyze the business areas of that are meeting their budget targets and the departments or areas that need improvement; and thus leading to a successful budgetary control