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Budgeting Is A Essential Component Of The Operations Of Any Business

Decent Essays
Budgeting is a necessary component of the operations of any business, hence, the monitoring, as well as, the management of the current assets is a requirement needed to ensure the appropriate flow between the income and the liabilities of this business (Branch and Lingo, n.d.). Current assets consist of numerous elements, such as cash, as well as, equivalents of cash. Additionally current assets, also, includes the accounts receivable, the inventory, the prepaid expenses, as well as, any further liquid assets which easily convert to cash within a span of time, usually one year or less (Investopedia, 2003). These assets constitute key elements that remain a crucial component to the business since they fund daily operations, as well as, the payment of the ongoing expenditures the business incurs.

Therefore, the quarterly financial statement presents financial data for analysis in timely manner for stakeholders, both internal and external (Ingram, n.d.). Furthermore, the information gained from quarterly comparisons provides a useful mode for viewing any trends, in addition to measuring business performance in relation to the business goals. The following data for the first and second quarters reflects the current conundrum our business faces. The cash for the first quarter was one hundred fifty thousand dollars, whereas, the second quarter revealed one hundred thirty-seven thousand dollars, which indicates a thirteen thousand dollar decrease, as well as, a decrease in
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