One of the tasks you face as a manager, especially if your organization makes frequent business transactions, is that of preparing a budget. A budget is a tool used for planning and controlling your financial resources. It is a guideline for your future plan of action, expressed in financial terms within a set period of time. A budget does not have to be complex. However, it should support the strategic plan for the organization. We will need resources to achieve our goals and objectives.

Imagine you are the healthcare administrator for Baptist Healthcare Services (BHS) Inc. Forthis project, focus on the operating budget. An operating budget shows the Baptist Healthcare Services (BHS) Inc., projected revenue and associated expenses for an upcoming periodusually the next year. An operating budget starts with revenue, and then shows each expense type. This includes variable costs, or the costs that vary with sales, such as the cost of raw materials and production labor. The operating budget includes fixed costs, such as the monthly rent on office space or the monthly payment for a photocopier lease. The budget also includes operating expenses, such as interest on business loans, and the non-cash expense of depreciation. These items enable the company to compute its projected net income and net profit percentage.

• Using the information provided develop a one-year operating budget using excel for the Baptist Healthcare Services (BHS) Inc., which will include operating revenues and expenses.