Planning and budgeting are must-have skills for all professionals, regardless of their function or managerial level. This course covers the concept of budgeting as a planning tool, a financial device, and a control mechanism. In addition, it provides the necessary application tools required to make long-term and short-term planning decisions.
Course Methodology
This course focuses on exercises, case studies, and individual and group presentations.
Course Objectives
By the end of the course, participants will be able to:
Defend the importance of linking an organization's budget with its strategic plan
Demonstrate how the budget relates to the balance sheet, income statement, and cash flow statement
Prepare the key elements of an operating and capital budget and evaluate the different budgeting approaches used
Apply cost control tools, analyze management variance reports, and take proper corrective action
Calculate different capital budgeting evaluation techniques as included in a capital expenditure proposal
Utilize cost-volume-profit analysis in making budgeting decisions
Target Audience
All managers, supervisors and analysts who prepare or use management budgets.
Target Competencies
Interpreting financial statements
Planning and budgeting
Cost control
Capital budgeting
Applying cost-volume-profit analysis
Utilizing breakeven analysis
Note
This course is worth 25 NASBA CPEs
Course Outline
Planning and the Functions of Management
The critical functions of management
Budget as a planning tool
Control: The missing link
Roadmap to strategy
Aligning the budget with the organization’s strategy
Planning pitfalls
The Key Financial Statements
The accounting system
The income statement
The balance sheet
Retained earnings
The cash flow statement
Budgeting: Process and Approaches
The advantages of budgeting
The budget process
Rolling budgets
Direct and indirect costs
The master budget
Operating and capital budgets
Approaches to budgeting:
Incremental budgeting
Zero-based budgeting
Flexible budgeting
Kaizen budgeting and continuous improvement
Activity-based budgeting
Tools of forecasting
Characteristics of an adequate budget
Problems in budgeting
Cost Control
Budget as a control tool
The control process
Characteristics of an effective control system
Responsibility reporting
Variance analysis:
Identifying the components of variance
Taking the corrective action
Capital Expenditure Budgeting and Analysis
Time value of money
The discount rate: Using cost of capital
Simple versus compound interest
Identifying and analyzing cash flows
Net Present Value (NPV)
Internal Rate of Return (IRR)
Profitability Index (PI)
Pay-Back Period (PBP)
Accounting Rate of Return (ARR)
Approval for Expenditure (AFE)
Sensitivity and risk analysis
Cost Volume Profit Analysis (CVP)
Defining fixed costs
Defining variable costs
Breakeven point in units
Breakeven point in dollars
Computing breakeven point in sales
Sensitivity analysis: Changing assumptions
Schedule & Fees
2026 Schedule & Fees
There are no public sessions remaining for the course this year. Please contact us if you wish to have a customized in-house session, or to find out how an additional public session can be scheduled.