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Purchase Benefits
What is included with this book?
Foreword | p. xv |
Preface | p. xvii |
Introduction To The Budgeting Process | |
Integrating The Balanced Scorecard for Improved Planning and Performance Management | p. 3 |
Overview | p. 3 |
Elements of a Balanced Scorecard | p. 5 |
Use of Strategy Maps | p. 11 |
Scorecard Cascading | p. 12 |
Bringing It All Together | p. 13 |
Integrating the Scorecard with Planning and Performance | p. 14 |
Balanced Scorecard and Annual Planning | p. 15 |
Continuous Strategic Management with the Scorecard | p. 22 |
Summary | p. 24 |
Strategic Balanced ScorecardâÇôBased Budgeting and Performance Management | p. 25 |
Introduction: Why Most Companies Fail to Implement Their Strategies | p. 25 |
Why a few Companies Produce Exceptional Results | p. 26 |
Measure your Strategy with Balanced Scorecard | p. 34 |
Balanced Scorecard-Based Budgets | p. 37 |
Performance Management | p. 38 |
Summary | p. 39 |
Budgeting and the Strategic Planning Process | p. 41 |
Definition of Strategic Planning | p. 41 |
Planning Cycle | p. 42 |
Strategic Planning Process: A Dynamic Cycle | p. 44 |
Situation Analysis | p. 46 |
Business Direction/Concept | p. 58 |
Alternative Approaches | p. 61 |
Operational Plan | p. 62 |
Measurement | p. 66 |
Feedback | p. 66 |
Contingency Planning | p. 68 |
Problems in Implementing Formal Strategic Planning Systems | p. 69 |
Summary | p. 70 |
Budgeting and Forecasting: Process Tweak or Process Overhaul? | p. 71 |
Introduction | p. 71 |
Survey Methodology | p. 72 |
Findings: Budgeting Process | p. 72 |
Findings: Forecasting Process | p. 86 |
Report Summary | p. 89 |
Developing a Road Map for Change | p. 90 |
The Budget: An Integral Element of Internal Control | p. 93 |
Introduction | p. 93 |
The Control Environment | p. 94 |
Planning Systems | p. 96 |
Reporting Systems | p. 98 |
Summary | p. 102 |
Relationship Between Strategic Planning and the Budgeting Process | p. 103 |
Introduction | p. 103 |
How to Plan | p. 103 |
The Audience for Whom the Plan Is Designed | p. 104 |
Strategic Business Planning and Its Role in Budgeting | p. 105 |
Planning Differences among Small, Medium, and Large Organizations | p. 106 |
Components of Strategic Planning | p. 107 |
Management and Organization | p. 108 |
Market Analysis | p. 110 |
Formulation of Marketing Strategies | p. 111 |
Operations Analysis | p. 112 |
Summary | p. 114 |
The Essentials of Business Valuation | p. 115 |
Introduction | p. 115 |
Understanding the Valuation Assignment | p. 117 |
Research and Information Gathering | p. 120 |
Adjusting and Analyzing the Financial Statements | p. 123 |
Three Approaches to Valuing a Business | p. 125 |
Income Approach | p. 125 |
Market Approach | p. 132 |
Asset Approach | p. 135 |
Making Adjustments to Value | p. 136 |
Reaching the Valuation Conclusion | p. 141 |
Moving Beyond Budgeting: Integrating Continuous Planning and Adaptive Control | p. 145 |
Introduction | p. 145 |
Annual Budgeting Trap | p. 146 |
Why Some Organizations Are Going Beyond Budgeting | p. 147 |
Beyond Budgeting: Enabling a More Adaptive Performance Management Process | p. 148 |
Climbing the Twin Peaks of Beyond Budgeting | p. 152 |
Beyond Budgeting: Enabling Radical Decentralization | p. 153 |
Moving Beyond Budgeting: An Update | p. 161 |
Introduction | p. 161 |
Beyond Budgeting Round Table (BBRT) | p. 162 |
Guardian Industries Corporation | p. 163 |
Tools And Techniques | |
Implementing Forecasting Best Practices | p. 169 |
Introduction | p. 169 |
Budgeting versus Forecasting | p. 170 |
Implementing Forecasting Best Practices | p. 170 |
Forecasting Best Practices: Process | p. 171 |
Forecasting Best Practices: Organization | p. 174 |
Forecasting Best Practices: Technology | p. 176 |
Conclusion | p. 178 |
Calculations and Modeling in Budgeting Software | p. 181 |
Introduction | p. 181 |
Why Companies Use Budgeting Software | p. 181 |
Calculations in Accounting Systems and Spreadsheets | p. 183 |
Budgeting Software | p. 184 |
OLAP Databases | p. 186 |
Modeling and Budgeting | p. 188 |
Processes | p. 189 |
More Complex Budgeting Calculations | p. 190 |
Conclusion | p. 192 |
Cost-Accounting Systems: Integration with Manufacturing Budgeting | p. 193 |
Introduction | p. 193 |
Decision Factors in the Selection Process | p. 194 |
Cost-Accounting System Options | p. 195 |
Costs Associated with a Product | p. 195 |
Labor Cost | p. 196 |
Variable Costing and Budgeting | p. 197 |
Full Costing and Budgeting | p. 217 |
Cost-Accumulation Procedures | p. 219 |
Valuation: Actual versus Standard | p. 221 |
Actual Costing | p. 223 |
Actual Costing, Budgeting, and Cost Control | p. 226 |
Standard Costing | p. 226 |
Variance Reporting | p. 231 |
Variances and Budgeting | p. 236 |
Manufacturing Overhead | p. 236 |
Manufacturing Overhead, Budgeting, and Cost Control | p. 247 |
Break-Even and Contribution Analysis as a Tool in Budgeting | p. 249 |
Introduction | p. 249 |
Break-Even Analysis | p. 249 |
Price/Volume Chart | p. 254 |
Contribution Analysis | p. 255 |
CostâÇôVolumeâÇôPrice and the Budgeting Process | p. 261 |
Profitability and the Cost of Capital | p. 263 |
Introduction | p. 263 |
A Market Gauge for Performance | p. 265 |
Coping with the Cost of Equity | p. 266 |
Building Company-Wide Profit Goals | p. 268 |
Building Divisional Profit Goals | p. 270 |
Information Problems and Cost of Capital | p. 276 |
Summary | p. 276 |
Budgeting Shareholder Value | p. 279 |
Introduction | p. 279 |
Long-Term Valuation | p. 281 |
Economic Value Added | p. 285 |
Complementary Measures of Valuation | p. 290 |
Budgeting Shareholder Value | p. 293 |
Summary | p. 296 |
Applying the Budget System | p. 297 |
Introduction | p. 297 |
Initial Budget Department Review of Divisional Budget Packages | p. 299 |
Divisional Review Meetings | p. 302 |
Budget Consolidation and Analysis | p. 303 |
Preliminary Senior Management Review | p. 303 |
Final Revision of Operating Group Plans | p. 304 |
Second Budget Staff Review of Operating Group Plans | p. 304 |
Revised Consolidated Budget Preparations | p. 305 |
Final Senior Management Budget Review Sessions | p. 305 |
Operating GroupsâÇÖ Monthly Submissions | p. 306 |
Effective Use of Graphics | p. 306 |
Summary | p. 306 |
Budgets and Performance Compensation | p. 307 |
Introduction | p. 307 |
Measures of Executive Performance | p. 308 |
Structuring Reward Opportunities | p. 316 |
Pitfalls of Linking Incentives to Budgets | p. 317 |
An Optimal Approach | p. 320 |
Adjusting Operating Unit Targets | p. 324 |
Budgets and Long-Term Incentive Plans | p. 326 |
Summary | p. 328 |
Predictive Costing, Predictive Accounting | p. 329 |
Internet Forces the Need for Better Cost Forecasting | p. 329 |
Traditional Budgeting: An Unreliable Compass | p. 330 |
Activity-Based Costing as a Foundation for Activity-Based Planning and Budgeting | p. 331 |
Budgeting: User Discontent and Rebellion | p. 331 |
Weary Annual Budget Parade | p. 333 |
ABC/M as a Solution for Activity-Based Planning and Budgeting | p. 334 |
Activity-Based Cost Estimating | p. 335 |
Activity-Based Planning and Budgeting Solution | p. 336 |
Early Views of Activity-Based Planning and Budgeting Were Too Simplistic | p. 337 |
Important Role of Resource Capacity Causes New Thinking | p. 337 |
Major Clue: Capacity Exists Only as a Resource | p. 339 |
Measuring and Using Cost Data | p. 340 |
Usefulness of Historical Financial Data | p. 341 |
Where Does Activity-Based Planning and Budgeting Fit In? | p. 344 |
Activity-Based Planning and Budgeting Solution | p. 345 |
Risk Conditions for Forecasting Expenses and Calculated Costs | p. 350 |
Framework to Compare and Contrast Expense-Estimating Methods | p. 352 |
Economics 101? | p. 355 |
Cost Behavior and the Relationship to the Budgeting Process | p. 357 |
Introduction | p. 357 |
Cost Behavior | p. 357 |
Break-Even Analysis | p. 360 |
Additional Cost Concepts | p. 365 |
Differential Cost Concepts | p. 368 |
Maximizing Resources | p. 370 |
Estimating Costs | p. 373 |
Summary | p. 375 |
Preparation Of Specific Budgets | |
Sales and Marketing Budget | p. 379 |
Introduction | p. 379 |
Overview of the Budget Process | p. 379 |
Special Budgeting Problems | p. 384 |
Pertinent Tools | p. 389 |
Unique Aspects of Some Industries | p. 392 |
Summary | p. 394 |
Manufacturing Budget | p. 395 |
IIntroduction | p. 395 |
Concepts | p. 400 |
Changing to a Cost-Management System | p. 402 |
Problems in Preparing the Manufacturing Budget | p. 407 |
Three Solutions | p. 410 |
Technique | p. 410 |
Determining Production Requirements | p. 411 |
Developing the Plannable Core | p. 413 |
Obtaining Sales History and Forecast | p. 413 |
Scheduling New and Revised Product Appearance | p. 415 |
Determining Required Inventory Levels | p. 416 |
Establishing Real Demonstrated Shop Capacity | p. 418 |
Publishing the Master Schedule | p. 424 |
A Total Quality Program—The Other Alternative | p. 425 |
Inventory and Replenishment | p. 431 |
More on the Manufacturing Budget | p. 434 |
Determining Raw-Material Requirements | p. 434 |
Determining Other Indirect-Material Costs | p. 436 |
Determining Direct-Labor Costs | p. 437 |
Establishing the Manufacturing Overhead Functions and Services | p. 440 |
Quality Control Economics Review Questions | p. 447 |
Plant Engineering Buildings and Equipment Maintenance | |
Review Questions | p. 449 |
Floor and Work-in-Process Control Review Questions | p. 450 |
Summary | p. 451 |
Research and Development Budget | p. 455 |
Relationship of Research and Development and Engineering to the Total Budgeting Process | p. 455 |
Problems in Establishing Research and Development and Engineering Objectives | p. 459 |
Developing a Technological Budget | p. 465 |
Preparing a Departmental Budget | p. 481 |
Managing a Budget | p. 484 |
Coordinating Project Budgets | p. 490 |
Administrative-Expense Budget | p. 493 |
Introduction | p. 493 |
Role and Scope of the Administrative-Expense Budget | p. 493 |
Methods Used for Preparing the Administrative-Expense Budget | p. 498 |
Factors that Impact the Administrative-Expense Budget | p. 502 |
Unique Issues Impacting the Administrative-Expense Budget | p. 503 |
Tools and Techniques for Managing the Administrative-Expense Budget | p. 504 |
Summary | p. 506 |
Budgeting the Purchasing Department and the Purchasing Process | p. 507 |
Description and Definition of the Process Approach | p. 507 |
Role of Process Measures | p. 512 |
Process Measures | p. 513 |
Creating the Procurement Process Budget | p. 517 |
Capital Investment Review: Toward a New Process | p. 519 |
Introduction | p. 519 |
Context of the Revised Capital-Investment Review Process | p. 520 |
Benchmarking Capital-Investment Review Best Practices | p. 523 |
Revised Capital-Investment Review Process: Overview | p. 527 |
Implementation: What Bonneville Learned in the First Three Years | p. 541 |
Summary | p. 544 |
Leasing | p. 545 |
Introduction | p. 545 |
Overview of the Leasing Process | p. 546 |
Possible Advantages of Leasing | p. 549 |
Possible Disadvantages of Leasing | p. 550 |
Types of Lease Sources | p. 550 |
Lease Reporting | p. 552 |
Lease versus Purchase Analysis | p. 560 |
Financial Accounting Standards Board Rule 13 Case Illustration | p. 564 |
Negotiation of Leases | p. 565 |
Selecting a Lessor | p. 566 |
Lease-Analysis Techniques | p. 566 |
Lease Form | p. 572 |
Summary | p. 579 |
Balance-Sheet Budget | p. 581 |
Introduction | p. 581 |
Purpose of the Balance-Sheet Budget | p. 582 |
Definition | p. 582 |
Responsibility for the Budget | p. 583 |
Types of Financial Budgets | p. 587 |
Preparing Financial Budgets | p. 588 |
Preparing the Balance-Sheet Budget | p. 591 |
Adequate Cash | p. 620 |
Financial Ratios | p. 620 |
Analyzing Changes in the Balance Sheet | p. 628 |
Budgeting Property and Liability Insurance Requirements | p. 635 |
Introduction | p. 635 |
Role Risk Management Plays in the Budgeting Process | p. 637 |
Types of Insurance Mechanisms | p. 638 |
Role of Insurance/Risk Consultants | p. 639 |
Use of Agents/Brokers | p. 639 |
Self-Insurance Alternatives | p. 640 |
Identifying the Need for Insurance | p. 643 |
Key Insurance Coverages | p. 645 |
Identifying Your Own Risks | p. 650 |
How to Budget for Casualty Premiums | p. 653 |
Summary | p. 656 |
Budgeting Applications | |
Budgeting: Key to Corporate Performance Management | p. 659 |
Future of Budgeting | p. 659 |
Adding Value to the Organization | p. 660 |
Corporate Performance Management | p. 661 |
Developing a Budget Process Focused on Implementation of Strategy | p. 662 |
Role of Technology | p. 666 |
Overcoming Organizational Resistance | p. 669 |
Planning and Controlling Implementation of a New System | p. 670 |
Conclusion | p. 675 |
Zero-Based Budgeting | p. 677 |
Introduction | p. 677 |
Problems with Traditional Techniques | p. 678 |
Zero-Based Approach | p. 679 |
Zero-Based Budgeting Procedures | p. 680 |
Decision Package | p. 681 |
Ranking Process | p. 687 |
Completing the Profit and Loss | p. 689 |
Preparing Detailed Budgets | p. 692 |
Summary | p. 695 |
Bracket Budgeting | p. 697 |
Introduction | p. 697 |
Application of Bracket Budgeting | p. 698 |
Premises to Profi ts? | p. 699 |
Developing a Tactical Budgeting Model | p. 700 |
Bracket Budgeting in Annual Planning | p. 719 |
Consolidating Income Statements | p. 720 |
Summary of Benefits | p. 720 |
Summary | p. 722 |
Program Budgeting: Planning, Programming, Budgeting | p. 723 |
Introduction | p. 723 |
Description of Program Budgeting | p. 724 |
History | p. 728 |
Framework of Program Budgeting | p. 734 |
Program Structuring | p. 747 |
Types of Analysis | p. 751 |
Installation Considerations | p. 759 |
Summary | p. 763 |
Activity-Based Budgeting | p. 767 |
Introduction | p. 767 |
Traditional Budgeting Does Not Support Excellence | p. 768 |
Activity-Based Budgeting Defi nitions | p. 771 |
Activity-Based Budgeting Process | p. 774 |
Linking Strategy and Budgeting | p. 775 |
Translate Strategy to Activities | p. 780 |
Determine Workload | p. 781 |
Create Planning Guidelines | p. 783 |
Identify Interdepartmental Projects | p. 783 |
Improvement Process | p. 787 |
Finalizing the Budget | p. 787 |
Performance Reporting | p. 788 |
Summary | p. 790 |
Industry Budgets | |
Budgeting For Corporate Taxes | p. 793 |
Introduction | p. 793 |
Taxation of C Corporations | p. 794 |
Personal Holding Company Tax | p. 799 |
Net Operating Loss Utilization | p. 799 |
Charitable Contributions | p. 800 |
Taxation Budget | p. 802 |
Federal Corporate Tax | p. 803 |
Purposes | p. 804 |
Tax Return | p. 804 |
Budgeting in the Global Internet Communication Technology Industry | p. 805 |
Overview | p. 805 |
Essentials from Earlier Chapters | p. 806 |
Freemium Strategies | p. 808 |
Volunteer Services | p. 809 |
Enterprise Risk Management | p. 811 |
About the Editor | p. 813 |
About the Contributors | p. 815 |
Index | p. 825 |
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