Master and Cash Budget

Using the information in the master budget and cash budget attached how can this be used by the managers of garden furnishing ltd to improve the financial performance and the situation of the organisation.

Please consider the following issues that have arose within the organisation

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Revenues and selling prices are on a similar level to competitors but business has much higher costs than competitors do, which seems to be leading to smaller profit margins than its direct competitors are.

The business is also very seasonal (high sales in spring and summer) therefore; the lack of budgeting has regularly left the business in very bad cash flow situations.

Garden Furnishings Ltd is a manufacturing business that produces garden furniture for the retail market. It is a family owned business that has historically had a relaxed approach to budgeting and business in general with a reluctance to change.

The business is seasonal and although selling prices are comparable to those of their competitors, the profit margins are low.


Individual managers are unaware of their expectations and use prior experience to base decisions on purchasing and production levels rather than a planned and co-ordinated multi-level approach. Procedures are not standardised and there is no recognition for managers that limit waste production compared to those that do not.

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