Thursday, September 26, 2019
Management Accounting Models Essay Example | Topics and Well Written Essays - 2500 words
Management Accounting Models - Essay Example The present research has identified that business finance is the term used to denote the funding activities for the efficient conduct of business activities. Therefore, business finance is helpful in many ways. Firstly, it helps to procure enough flow of funding required in business. Secondly, it is important for maintaining and enhancing better management system by supplying the required amount of capital. Lastly, it is the foremost factor for obtaining the adequate amount of profitability. The prime objective of a business is to generate profit by investing in projects. In order to fulfill the primary financial objectives, the decision makers of a company plan their financial activities. The planning of financial activities is known as budgeting and it is very vital for the smooth functioning of financial operations. A proper financial budgeting makes the entire operation efficient and effective. Budgeting plays a crucial role in the decision making the process for a company. Oberl in states that Ã¢â¬Å"budgets are the link between plans and actions. They translate strategic plans into the financial resources necessary to implement the planÃ¢â¬ . Companies prepare many types of budgets like capital budgets, sales budgets, production budgets, cash budgets, inventory budgets etc for planning their operational activities. In fact, the budgets help the organizations to achieve the organizational and financial target on behalf of all the departments.