FINA-363

Reduces-level budget

defines a predetermined percentage by which the unit must cut the budget.

Cash budget

a forecast of how much cash an organization will have on hand in a specific time period and how much it will need to meet expenses during that time.

Revenue budget

a forecast of revenues based on projections of the organization's sales

Program planning budget systems PPBS

an approach to developing a program budget that focuses on outputs rather than inputs, with an emphasis on organizational effectiveness, not spending.

Periodic expenses

an expense that does not occur regularly throughout the year but must be budgeted for during the year, such as new vehicles, retirement bonuses, and other one-time events.

Mixed costs

both fixed and variable costs

Sensitivity analysis

process of developing several forecasts under different scenarios and assigning probabilities to each scenario to arrive at an acceptable forecast.

Two keys to successful budgeting

1: input from the entire organization 2: a means of sharing the budget across the organization

Zero-based budgeting

a budgeting approach and financial management strategy intended to help decision makers achieve more cost effective delivery of goods and services.

Modified zero-based budgeting MZBB

a budgeting concept that starts at the base higher than zero and matches spending levels with services to be performed.

Decision package

a discrete addition to a reduced-level budget to maintain an existing program, serve as increased work load, or add a new program

Capital expenditure budget

a forecast of expenses and income related to a capital budget.

Incremental budgeting

a form of line-item budgeting in which next year's budget is a result of either decreasing or increasing last year's budget for each line item by the same percentage.

Expense budget

a list of a business unit's primary activities, with a dollar amount allocated to each

Budget

a set of financial statements based on projections resulting from a particular scenario, generally, the most likely or hoped for scenario.

Decision unit

each part of the organization where budget decisions are made

Planning

establishment of objectives and the formulation, evaluation, and selection of the policies, strategies, tactics, and actions required to achieve those objectives.

Strategic planning horizon

extends far into the future, planning for this time period focuses on the long-tern aspirations of the sport organization and management.

Base budget

first created at the decision unit and contains the expenditure levels necessary to maintain last year's service level and next year's prices.

Line-items

objects of expenditure

Business planning horizon

period over which forecasts can be made with a reasonable degree of confidence, usually three to five years.

Forcast

prediction and quantification of future events for the purpose of budgeting.

Line-item budgeting

technique in which line items are the main focus of analysis, authorization, and control.

Budget time horizon

the immediate future, which can be predicted with a reasonable degree of certainty on the basis of past business decisions and commitments. Usually 12 months.

Strategic planning

the process of defining a vision for your organization and creating goals and objectives to help achieve this vision- since these strategic decisions usually have financial implications.