Business and Management
Submitted By cderbyshire66
Planning a Budget * Davis Service Group PLC employ around 17,000 people. * Its shares are quoted on the London Stock Exchange. * It mainly cleans and maintains things like industrial textiles, such as protective clothing. * They do this for four sectors work wear, healthcare, hotels and restaurants and general facilities. * They are a national company but only in Europe. * Careful budgeting has helped Davis to continue to be a profitable company even through the recession.
Building a Budget * Some variables in a business that can be budgeted include: * Sales * Output * Costs * Operating and fixed * Profits * Cash flow * Capital investment. * A business’ budget for the year is based on assumptions of what will happen in the year ahead. * The budget is flexible to a certain extent and can be changed if for example, the manager sees that sales are significantly lower/higher than what was expected. * Zero budgeting is used by some managers and it means that they start every year at zero and then justify each expenditure rather than having a proper budget. * Budgets are most likely yearly but can be longer or shorter. * Davis’ budget runs from January through to December. * Davis Service Group is careful to set budgets in consultation and not to impose them on the different parts of the business.
Making Assumptions * A budget needs to make assumptions about how internal and external business conditions will develop and change. * After these assumptions and their affects have been evaluated the detailed planning can begin to estimate the plant capacity, staffing, materials and marketing needed. * Sometimes managers will use sensitivity analysis to review different scenarios. * They think about all the possible things that could happen and evaluate the…...