To manage their spending, businesses, like individuals, need budgets. Budgets help managers and their employees know whether theyre on target for their growth and spending goals. Budgets are important for all types of companies: large financial institutions, such as Citigroup, which suffered big financial losses after the housing bubble burst in the mid-2000s; large retailers, such as Home Depot, whose profit margins are thin; profitable computer companies, such as Apple, which sell high dollar-value goods; and luxury hotels, such as the Ritz-Carlton, which sell high dollar-value services.

Describe the benefits of preparing a master budget for an organization.