Budgeting Fundamentals

Overview/Description
 This course teaches you how to understand, plan, and implement budgets for businesses, departments, or nonprofit organizations. You will develop the skills and learn how to use the tools that will enable you to develop flexible, yet controllable, budgets.

Target Audience
 Managers and other professionals with limited exposure to or understanding of financial systems. These people often have budgetary responsibilities and require a better understanding of the principles of basic accounting in order to perform that function.

Expected Duration
3 hours

Lesson Objectives:

Financial Statements

  • recognize the importance of analyzing past financial statements when planning a budget.
  • recognize the parts of an income statement and use them to calculate gross margin and net profit.
  • recognize the parts of the balance sheet and the relationships between them.
  • correctly identify and compute vertical relationships and horizontal trends on income statements and balance sheets in both general and specific examples.
  • use direct and fixed costs to perform break-even analysis when given a case study.
  • recognize the six essential ingredients of budgets when presented a hypothetical situation.

    • Building Valid Assumptions

  • recognize the value of the information provided by bottom-up and top-down budgets, when engaged in the budgeting process.
  • summarize financial trends when shown an example of several years of sales, fixed expenses and direct expenses data from an income statement.
  • correctly classify the types of forces described in an example.
  • correctly calculate budget revenue when given a problem containing total fixed expenses and direct expense percentage.
  • correctly explain the role of controllable fixed expenses in setting the top-down budget when given a multiple choice question.

    • Controlling and Implementing Budgets

  • recognize the value of controlling budgets through monthly implementation when engaged in the budgeting process.
  • compare the methods of fixed cost allocation across departments when given a case study.
  • make decisions for action based on a cash flow worksheet containing budget and actual performance data.

    • Course Number: FIN0103