Before you read the passage, talk about these questions.

Budgeting

Before you read the passage, talk about these questions.

1. Why does a business need to make a budget?

2. How do businesses use their budgets?

Task 1. Read the passage.

Why budget?

Imagine wanting to build a house. Would you carefully draw up detailed plans that showed every part of the structure that you wanted to build? Or would you gather a hammer, some nails, and some pieces of wood and just start putting everything together? It makes no sense to build something without a plan. This principle is true in the business world as well.

No one would try to run a business without a plan. A great way to plan for the financial future is business budgeting. Business budget by setting concrete goals built on realistic forecasts. Obviously, it costs time and money to develop such detailed models. Managers must make educated guesses about how much they can invest in budgeting. They must also decide whether to budget long-term or short-term (also called near-term).

Despite the cost, budgeting is an essential business function. It serves as a yardstick for measuring the company’s performance. In other words, it can compare its goals to its accomplishments at the end of a budget period. Budgeting also serves as a blueprint for the future. If a forecast predicts economic decline, a company will tighten its budget. But if this negative outlook is reserved and economic expansion is predicted, the budget may be expanded to reflect a more positive outlook.

Task 2. Match the words (1-6) with the definitions (a-f).

1. forecast 2. tighten 3. near-term 4. long-term 5. yardstick 6. negative outlook

a. a tool used to measure something b. to reduce activity and flexibility c. over a lengthy period of time d. a gloomy view of the future e. a prediction about the future f. over a small period of time

Task 3. Fill in the blanks with the correct words and phrases.

concrete goals business budgeting model short-term positive outlook

1. Set ____________ and then pursue them.

2. Companies have a(n) ______________ when the economy looks good.

3. ______________ is one of the best ways to plan ahead.

4. The budget is ___________, covering just two months.

5. A budget is a ____________ based on plans and forecasts.

Task 4. Listen to a conversation between a manager and an accountant. Choose the correct answers.

1. What is the dialogue mostly about?

a. why the budget was exceeded

b. steps for making a budget

c. routine spending patterns

d. techniques for estimating costs

2. Accountants use estimates with

a. some costs

b. low forecasts

c. spending levels

d. short-term budgets

Task 5. Listen again and complete the conversation.

Accountant: All right, next let’s look at our costs. We have to adjust our costs in order to maximize our profits.

Manager: Hmmm… That’s __________ _________ _________.

Accountant: Yes, it is. We’ll have to use estimates and _________ _________ with some of the costs.

Manager: OK, then what?

Accountant: Then we adjust costs according to our sales forecasts.

Manager: So we might have to look for _________ _________ __________ our costs if the sales forecasts are low?

Accountant: Exactly. And if the forecasts are high, we might be able to increase our spending _________ _________ _________.

Manager: But _________ _________ _______ ________ ________ increase our profits, right?

Accountant: Of course. ________ ________ _______ _________ of budgeting.

Task 6. Speak on the importance of budgeting.

Дата добавления: 2015-11-04