It is also know as an Annual Profit Plan. It includes many components and supporting schedules. It has two main types of budgets: operating and financial.
It identifies resourcesthat are needed for operationsand are concerned with the acquisition of these resources through purchase or manufacture. Operating budgets include: sales, production, DM, DL, overhead, selling expense, and administrative expense budgets. THese budgets culiminate in the formation of the pro forma income statement
It matches sources of fundswith the uses of funds in order to achieve the goals of the firm. these include Capital Expentiture, cash budget, pro forma balance sheet, and the pro forma statement of cash flows.
A subjective estimate of the firm's future sales for the upcoming period.
It is the basis of all operating budgets and includes the number of units and pricing for projected period
A plan for acquiring resources and combining them to meet sales goals and maintain a certain level of inventory.
DM Usage Budget
It specifies the amount an cost of materials needed for production (based on the production budget) and the amount and cost of materials that must be purchased to meet the production requirements.
DM Purchase Budget
It specifies the amount and cost of materials that need to be purchased to meet production and inventory needs.
Cost of goods sold(cogs)
It is the total cost of producing goods for a period. It is created from the production, Sales, material, labor, and overhead budgets.
Selling and Administrative Expense budget
It includes all non - manufacturing expenses.
Pro Forma Income Statement
This statement includes Total Sales Amount from sales budget, Less the cost of goods sold from COGS budget, less S & A expenses fro the S & A budget, less interest on existing debt, less taxes - calculated by multiplying EBT by rax rate, and then arriving at Net Income
these are created to identify the assets and capital - both debt and equity - needed to support the operation. It includes the capital Expenditure budget, cash budget, Pro Forma Balance Sheet and Pro Forma statement of cash flows.
Represents the amount of money the company plans to invest in selected capitla projects, which include purchases of property, plant, or equipment, as well as purchases of new businesses or operating capabilities.
Indicates the amount of cah receipts and disbursements an organization faces in a given period. It also shows the short-term financing the organization needs to take on if it has defient cash and the short-term investmetns thaken if it has excess cash.
Pro Forma Balance Sheet
It illistrates how operations should affect the company's assets, liabilities, and stockholders' equity.
Pro Forma Statement of Cash Flows
It projects the sources and uses of funds. It includes the operating, Investing, and Financing activities.