Giampietro Parolin
Prof. of Business Strategy - Consultant.
Presentation prepared for the EoC StartUp Lab - Africa 2017 (Cameroon)
Budgeting for a business is a process: preparing a detailed statement of financial results that are expected for a given time period in the future:
- "expected" means something that is likely to happen - "future" which is a period in the time to come (a month, a year)
Types of budgeting
Operating Budget is based primarily on the firm's sales forecast. It is a budget of sales revenue minus expenses and essentially ends up with gross profit.
Cash Flow Budget is a budget showing expected cash inflows (receipts) and cash outflows (expenses). The cash flow budget shows whether or not enough cash will be available to meet monthly expenses.
Capital budgeting is budgeting for the large expenses in a business firm. Capital budgeting is budgeting for the fixed assets that the firm needs to work such as plant and equipment.
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