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Why financials are important in budgeting process?

Debt to equity ratio tells you the financial health of the business, calculated by: total liabilities divided by total assets, if the result is atleast is0.6 or above then you can say it is ideal.

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Question ajoutée par HASSAN AHMED , Internal Auditor , TIE
Date de publication: 2016/03/28
georgei assi
par georgei assi , مدير حسابات , المجموعة السورية

Debt ratio to vary depending on the company's shareholders' equity type. For example, figure 2 is a good proportion of capital-intensive industries, such as automakers, while this percentage is low in software companies, where up to 0.5.

 

 Financial soundness ratios

Debt ratio to clarify property rights in the company's debt-to-equity, which the company uses to finance its assets ratio. The ratio of debt to shareholders' equity is calculated by dividing the total debt to total equity:

 

Debt / equity ratio = Total debt / Equity

 

Debt ratio indicates a high equity ratio that the company is carrying a relatively heavy debt burden.

Abdul Khalique
par Abdul Khalique , Finance Manager , Value Real Estate & Construction

Thanks for invitation. Budgeting is a means of coordinating the combined intelligence of an entire organisation into a plan of action based on past performance and governed by rational judgment of factors that will influence the course of business in the future. The main objective of Budgeting is to help in achieving the overall objective of the organization. The process of budgeting begins with the establishment of specific targets of performance and is followed by executing plans to achieve such desired goals and from time to time comparing actual results with the target goals.

 

Now–a–days detailed estimates in terms of quantities and amounts are drawn up before the start of each activity. This is done to ensure that a practicable course of action can be chalked out and the actual performance corresponds with the estimated or budgeted performance. Financial Ratios have predictory value and they are very helpful in forecasting and planning the business activities for a future. It helps in budgeting. Financial Ratios are able to provide a great deal of assistance, budget is only an estimate of future activity based on past experience, in the making of which the relationship between different spheres of activities are invaluable. It is usually possible to estimate budgeted figures using financial ratios. Ratios also can be made use of for measuring actual performance with budgeted estimates. They indicate directions in which adjustments should be made either in the budget or in performance to bring them closer to each other.

Thank you for Invitation Mr . Georgei

I agree with your answer

with my best wishes to you

 

 

Ahmed Mohamed Ayesh Sarkhi
par Ahmed Mohamed Ayesh Sarkhi , Shared Services Supervisor , Saudi Musheera Co. Ltd.

agree with great answer add by Mr. Georgei

حسين محمد ياسين
par حسين محمد ياسين , Finance Manager , مؤسسة عبد الماجد محمد العمر للمقاولات العامة

agree with answers >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Abdelhafiz Elkhidir Sidahmed Mohammed Kheer
par Abdelhafiz Elkhidir Sidahmed Mohammed Kheer , مدير التدريب والدراسات والبحوث , اتحاد المصارف السوداني

Thank you for Invitation    /////////////////////////////////////////////////

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