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Planning, Budgeting and Controlling
Introduction to Finance (FIN2303)
Algonquin College
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Chapter 7
Planning, Budgeting and Controlling
REVIEW QUESTIONS
- What is the connection between SWOT analysis and planning assumptions?
SWOT analysis is the process of identifying a company’s strengths and weaknesses (internal analysis) and opportunities and threats (external environment). This analysis helps managers to formulate planning assumptions, which establish boundaries upon which a company’s plans and budgets are based. 2. What is the relationship between planning assumptions and budgeting?
Planning assumptions set the boundaries within which priorities, goals, and plans are established which helps to determine who is going to do what, when, how, and where. Budgeting has to do with the allocation of resources 3. What is planning and why is it so important?
Planning is the process of formulating goals and outlining action plans to realize the goals. Planning is important because it forces managers to be more creative; helps integrate short-term plans with long-term plans; provides a sense of purpose and direction; enables a business to cope with change; and simplifies managerial control.
- What is the difference between a performance indicator and a performance standard?
A performance indicator describes the type of measurement to be used to gauge organizational performance while a performance standard is a benchmark (number) against which performance is measured.
5. What is the purpose of SWOT analysis?
SWOT analysis is the first step in the planning process which forces managers to analyze (1) their company’s internal activities or functions for the purpose of identifying their strengths and weaknesses, and (2) their external environment to pinpoint the opportunities and threats.
6. Why are planning assumptions useful?
Planning assumptions establish boundaries within which company plans and budgets are established. They also help various divisional managers within an organization to be consistent in developing their objectives, plans, budgets, and financial projections.
7. What is budgeting?
Budgeting is the process by which management allocates corporate resources, evaluates the financial outcome of its decisions, and establishes the financial and operational profile against which future results will be measured.
justification; all dollars, including last year's authorized expenditures and new requests are equally scrutinized.
12. Why is the balanced scorecard so effective as a
management tool?
The balanced scorecard has the power to translate the mission statement, the value goals, the vision statement, and the strategies into measurable targets and action plans in addition to being capable of gauging to what extent overall targets are being realized.
Planning, Budgeting and Controlling
Course: Introduction to Finance (FIN2303)
University: Algonquin College
