Question

1. 2017 business tax cuts

2. Budgeting and types of budgets (financial, line-item, cash flow, master, sales, etc.)

3. Business plans and their components

4. Internal and external data

5. Short-term v. Long term planning

Answer 1

Answer(2): Budgeting- It is a planning of spending money on a certain item or task. It is the process of making plans and strategy how the money will be spent in the coming future, budget is the estimate of future spending. Budgeting is a technique of balancing the expenses with income.

Types of Budget- Are as following:

Financial budget- A budget that is made for management of finance, is called financial budget. It presents the revenue of company's operations and shows the financial health of company.

Operating budget- It is made to project income and expenditures in the upcoming months. This is generally made on weekly, monthly and quarterly basis.

Cash flow budget- This budget is made to estimate the cash inflow and outflow and the net cash availability. Cash is an important item of business, company should keep some cash for day to day operations and working capital management. By making cash budget, company can know the excess or shortfall of cash in the business.

Master budget- It is an aggregate budget of all the company's budgets. It is made to present the complete picture and status of financial activities and items. It includes all the individual budgets like; cash, sales, operating, income budget etc.

Answer(3): Business Plan- It is a planning of describing and achieving the vision, mission and goals of organization. It is a road map of success of the business.

Components- These are as following:

1. Executive summary
2. Business description
3. Market analysis
4. Organization management
5. Sales strategies
6. Funding requirements
7. Financial projections

Answer(4): Internal Data- It is the information, available within the organization, it can be generated within the business, it can be used as the primary data for any task, some internal data is confidential and should not be leaked or issue in the public domain.

Example: Vouchers, Receipts, Invoices etc.

External data- This is the information, available in public domain. This data is presented in the news paper, on internet, website etc.

Example: Balance sheet, Annual report etc.

Answer(5) Short-term planning- This planning is done for one year. When things are planned to present the results within a year, it is called short term planning.

Example: Sales targets

Long term planning- This is done for more than one year and generally for 5 years. This planning is based on company's vision and mission that will be achieved in 5 years.

Example: Capital expenditures, purchasing an asset, investments etc.