Question

The role of budget in planning the future performance of the company in today's business environment. ( for a research )

Answer 1

Solution:

Budget is a formal written document containing,

a. Future objective

b. Approach to be adopted for the achievement of such an objective.

c. Arrangement of resources for achievement of such objective.

2. Budgetary control can be used to plan a budget, budgetary control means the activity of controlling the budgets. When the budget are set-up, in the beginning, it is necessary for the management to provide necessary infrastructure and resources, so that the target may be achieved.

Role of a budget In today's business environment:

1. Budget is very helpful in making effective utilization of whatever available resources i.e. Money, machine, labour, material, etc.

2. Effective conduct of the business activity.

3. Effectively increasing the profit by controlling and reducing the expense.

4. Improve Co-ordination and Co-operation among various employee.

5. Preparation of Budget.

6. Continous comparison of budgeted performance with actual performance.