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Describe the process of budgeting and variance analysis in financial management. Explain how budgets are prepared, monitored, and compared to actual performance, and discuss the
Describe the process of budgeting and variance analysis in financial management. Explain how budgets are prepared, monitored, and compared to actual performance, and discuss the significance of variance analysis in evaluating financial performance and making corrective actions.
Budgeting involves creating a financial plan for a specific period, while variance analysis compares actual performance against the budgeted figures. Explain the process of preparing budgets, including setting financial goals, estimating revenues and expenses, and developing a budgeted financial plan. Discuss how budgets are monitored and compared to actual performance to identify variances. Describe the significance of variance analysis in assessing financial performance, identifying areas of concern, and making informed decisions for corrective actions.
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