Financial strategies

Question 1

budgets

Answer 1

forecasts future earning and future spending usually over a 12 month period.

Question 2

income budgets

Answer 2

forecasts the amount of money that will come into the company as revenue

company needs to predict how much it will sell and at what price - use sales figures from previous years as well as market research

Question 3

expenditure budgets

Answer 3

what the businesses total costs will be for the year taking into account both fixed and variable costs

variable costs increase with output, so managers must predict output based on sales

Question 4

profit budgets

Answer 4

uses income budget - expenditure budgets to calculate expected profit