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Finance & Accounting
Pages 3 (753 words)
Budgets Name College Course Date 1 Finance benchmarking is the process where a company compares itself with another in order to access its performance in reference to the other company used as a benchmark (Platen & Heath, 2009). By so doing, the company will be able to identify areas that need to be improved and those tasks that are wasting a lot of companies’ capital to be completed.
Operational review enables the company to compare its current data with the past. By looking at the past trend and history of the company the company will establish its position in comparison with the past. Financial ratio technique enable the company to take current financial statement apply mathematical formulas to it and then coming up with a metric. Once financial ratios are applied in other companies then it becomes possible to compare one company to another. Financial ratio technique is the best because it enables a small company to compare itself with a bigger company (Platen & Heath, 2009). Financial ratio also makes it possible for companies that are equal in both size and capacity to compare their performance. Operational review will not be giving a company its true positions in the market because the company will not compare itself with others. 2 If the workload required to keep business fully in operation is not estimated correctly, this will drastically reduce the value of operating budget because before making any budget proposal one is first required to estimating the workload required to accomplish its activities so as to determine the budget allocation (Platen & Heath, 2009). ...
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