In: Operations Management
Why is it important to project the first-year financial performance on a monthly basis and the subsequent yearly budgets, on a quarterly basis? Explain.
Financial performance identifies or measure How well a company can use the asset from its business and generate the revenue. Financial performance play a very important role in the business. With the help of Financial performance, we can analyse the performance of the company, how well a company can generate the liabilities, assets etc. Many of the organization measure the Financial performance on a monthly basis. This will help the company to correctly analyze the performance of the company as well as ensure that the company is going on track with its goal of minimizing the expenses. By projecting the Financial performance on monthly basis company can measure the financial performance of the company. which helps them to make a decision for the future.
Whereas, Many of the firms analyze or measure the yearly budget on a quarterly basis. Yearly budget report tells the firm about the company's performance from the past months, year and By analyzing on a quarterly basis. Firm review the previous four months performance of the company. Which helps them to manage and predict the future performance of the company. By measuring on quarterly basis, Firms can take a decision. which gives the direction to the firm for the future.