Compare the differences between a cash budget and an operating budget, and explain why both are beneficial.

Purpose of Assignment
In this assignment, you will be evaluating a cash budgeting scenario and developing a financial plan for a fictional business.

Assignment Steps

Review the Cash Budgeting Scenario.

Calculate the cash budget using the Cash Budget Worksheet, and use the Cash Budget Worksheet Answers to review your work.

Write a 700- to 1,050-word financial plan in which you complete the following:

-Discuss potential cash budget benefits and pitfalls for the business, including how the budget supports the strategic   goal of the business to increase revenue by 10% annually.

-Outline your expected business expenses (e.g. fixed and variable costs, marketing, labor, operations, insurance) and sources of revenue (e.g. funding, sales of products/services).

-Include an income statement, balance sheet, and cash flow statement.

-Explain how you will adjust your small business cash budget to manage contingencies (such as emergencies and market shifts) as well as product and distribution shifts.

-Compare the differences between a cash budget and an operating budget, and explain why both are beneficial.

-Explain why a budget variance analysis is crucial for the operation of a business, and discuss how often a budget variance analysis should be performed.

-Summarize your findings/recommendations.

 
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