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2.2 Financial Planning - Coggle Diagram
2.2 Financial Planning
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sales, revenues and costs
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breakeven
contribution
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contribution is the portion of sales revenue that is not consumed by vairable costs and so contibutes to the coverage of fixed costs, whatever is left is profit.
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budgeting
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approaches to budgeting
historical- use of last years figures and realistic however circumstances may have changed and it doesn't encourage efficiency
zero based- costs and revenues set to zero, based on new proposals however is more complicated and time consuming
using budgets
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analysis of variances- trying to find reasons for the differences between actual and expected outcomes
Variances
the difference between the budgeted figure and the actual figure, usually calculated at the end of the budget period
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