Heeter Financial Analysis and Budgeting

Reorder the following 5 Primary purposes of budgeting systems

• Planning

• Facilitating Communication and Coordination

• Controlling Profit and Operations

• Allocating Resources

• Evaluating Performance and Providing Incentives

A comprehensive set of budgets covering all phases of an organization's operations for a specified time period

• Capital Budget

• Master Budget

• Budgeted financial statements

• Financial Budget

Shows how the organization's financial statements will appear at a specified time, if operations proceed according to plan. Includes a budgeted income statement, budgeted balance statement, and budgeted statement of cash flows.

• Budgeted financial statements

• Master Budget

• Capital Budget

• Financial Budget

A plan that shows how the business will acquire its financial resources (issuance of stock, incurrence of debt)

• Financial Budget

• Capital Budget

• Budgeted Financial statements

• Master Budget

A plan for the acquisition of capital assets (buildings/equipment)

• Capital budget

• Financial budget

• Master Budget

• Budgeted financial statements

Short range budgets

• Any time period of 1 year or less

• Could be yearly, quarterly, monthly, etc

• Cover a time period of >1 year

• Updated by periodically adding a new incremental time period

Match the following

• Cover time period of >1 year

• Rolling budgets

• Any time period of 1 year or less. Could be yearly, quarterly, monthly

• Short- range budgets

• Continually updated by periodically adding a new incremental time period

• Long-range budgets

When planning the master budget, one should consider

• Quantity and cost of inputs

• Quantity and cost of resources needed for conversion

• Units and revenues of outputs that can be sold

• Past sales and trends

The Master Budget is a comprehensive profit plan that ties together all phases of a pharmacy's operations

• True

• False

When forecasting sales, which of the following are some of the major factors are considered?

• Past sales

• General economic trends

• economic trends in pharm industry

• political/legal events

• planned advertising/promotional activities