Budgets

This PowerPoint, “Financial Planning and Budgeting – Cambridge A-Level Business (9609),” is a structured and practical guide to financial management for Year 13 students. It covers six comprehensive chapters:

1. Understanding Financial Planning – Introduces financial planning as a “GPS for business,” with real examples (Tesla, Sainsbury’s) and highlights its importance for direction, resource allocation, progress measurement, and cash flow management.

2. Budgeting – The Practical Tool – Defines budgets as quantified financial plans and explains five key benefits: planning, resource allocation, target setting/motivation, coordination, and control/monitoring.

3. Types of Budgeting Methods – Compares three approaches:

   • Incremental Budgeting (simple, based on past budgets)
   • Zero-Based Budgeting (ZBB) (justify every expense from scratch)
   • Flexible Budgeting (adjusts for changes in output)

4. Limitations of Budgeting – Critically examines challenges: inflexibility, short-termism, unnecessary spending (“use it or lose it”), high implementation costs, and inaccuracy for new projects.

5. Variance Analysis – Teaches how to calculate and interpret variances (favourable vs. adverse), apply “management by exception,” and identify hidden dangers in favourable variances.

6. Integrating Financial Planning Concepts – Shows the continuous planning-budgeting-control cycle with a real-world example (Tesla’s production and corrective actions).

Ideal for A-Level students and teachers, this resource blends theory with practical examples, case studies, and exam-focused insights to build a strong understanding of financial planning and budgeting.