Business & Marketing Coursework: Objectives of Master Budgets

Objectives of Master Budgets
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Objectives of Master Budgets
A master budget is a combination of all the lower level budgets of a business. Additionally, it also includes the cash flow statements, financial forecasts and a financial plan. Companies normally produce master budgets yearly which can be split into months.
In the Domino’s pizza company, a master budget can be used for planning, directing and controlling. This is because budgeting helps the organization to predict any future financial strategies. Computer technology has enabled various organizations to predict any future rise or fall in customer demands. Through simulation, the company management can alter their budgets according to what they see on the changing market value ratios, future profit margins and the yearly turnover. The budget can be classified into the operating budget and the sales budget. First and foremost, the operating budget is a detailed projection of the future cost of running a business (Wooten & Di...