Favorable And Unfavorable Variance Analysis
JET2 Financial Analysis
Task 2
TABLE OF CONTENTS
Introduction 3 undefined depreciation 4
Supply chain Distribution costs 4-5
Executive and Administrative compensation 5-6
utility Expenses 6
sales projections 7
flexible budget 7-8
Favorable and Unfavorable Variance Analysis 8
master budget 9-12
management by EXCEPTION 13-15
References 16
Introduction
For a business to grow and survive in today 's dynamic environment where profit margins are squeezed and businesses are forced to operate with lower costs, budgeting and forecasting are important financial disciplines for business success. The challenge not only lies in drafting the budget, but also in operating within the constraints of …show more content…
FY 8 reduced sales was primarily due to a downturn in the overall economic situation which affected professional rider’s sponsorship. CBI also disclosed that there was an anticipation that future sponsorships would be declining in the coming years. While the Budget reports for FY 9 predict an increase in units sold, with a decline of $1000 in the Advertising budget, it is challenging to imagine an increase in sales. A solution would be to either have Marketing and Advertisement budget remain the same or be increase to account for the projected increase in sales. Similarly, by using social media to launch a creative targeted and yet fiscally responsible marketing campaigns, CBI can gain increased product and service awareness and gain added customer base and ultimately increase sales and …show more content…
Namely create a media presence on typically free blog sites and other social media sites and by removing the advertisement focus from leadership to the hands on operations teams and possibly with partnering with distributors who see the customers face to face, CBI gains opportunities to gain from inexpensive if not free advertising solutions, increasing efficiency and revenue while decreasing expenditure.
Utility Expenses
While utility expenses are not listed within the variable costs- this is another area to mid-level managers and operations teams to recommend energy improvement measures which will ultimately improve the utility consumption but also moral as it can educate employees, vendors and suppliers about the benefits of energy-wise behavior
Budgets don’t guarantee success, but they certainly help to avoid failure. The budget is an essential tool to translate general plans into goals and objectives while providing a mechanism for identifying and focusing on departures from the plan. The budget communicates the benchmarks against which to judge success or failure in reaching goals and facilitates timely corrective
Task 2
TABLE OF CONTENTS
Introduction 3 undefined depreciation 4
Supply chain Distribution costs 4-5
Executive and Administrative compensation 5-6
utility Expenses 6
sales projections 7
flexible budget 7-8
Favorable and Unfavorable Variance Analysis 8
master budget 9-12
management by EXCEPTION 13-15
References 16
Introduction
For a business to grow and survive in today 's dynamic environment where profit margins are squeezed and businesses are forced to operate with lower costs, budgeting and forecasting are important financial disciplines for business success. The challenge not only lies in drafting the budget, but also in operating within the constraints of …show more content…
FY 8 reduced sales was primarily due to a downturn in the overall economic situation which affected professional rider’s sponsorship. CBI also disclosed that there was an anticipation that future sponsorships would be declining in the coming years. While the Budget reports for FY 9 predict an increase in units sold, with a decline of $1000 in the Advertising budget, it is challenging to imagine an increase in sales. A solution would be to either have Marketing and Advertisement budget remain the same or be increase to account for the projected increase in sales. Similarly, by using social media to launch a creative targeted and yet fiscally responsible marketing campaigns, CBI can gain increased product and service awareness and gain added customer base and ultimately increase sales and …show more content…
Namely create a media presence on typically free blog sites and other social media sites and by removing the advertisement focus from leadership to the hands on operations teams and possibly with partnering with distributors who see the customers face to face, CBI gains opportunities to gain from inexpensive if not free advertising solutions, increasing efficiency and revenue while decreasing expenditure.
Utility Expenses
While utility expenses are not listed within the variable costs- this is another area to mid-level managers and operations teams to recommend energy improvement measures which will ultimately improve the utility consumption but also moral as it can educate employees, vendors and suppliers about the benefits of energy-wise behavior
Budgets don’t guarantee success, but they certainly help to avoid failure. The budget is an essential tool to translate general plans into goals and objectives while providing a mechanism for identifying and focusing on departures from the plan. The budget communicates the benchmarks against which to judge success or failure in reaching goals and facilitates timely corrective