Nestle Company

NESTLE COMPANY 4

NestleCompany

NestleCompany

Thefollowingis a reviewof balancesheetas of December 31, 2014 andthecorrespondingstatementsof incomeandretainedearningsin additionto its cashflows.Allinformationencompassedin thesefinancialstatementsis theaccountof themanagementof theCompany. Accordingto thereview,there is nomaterialmodificationsthat should be includedintheaccompanying financialstatementswith thepurposeto be in conformitywith thecommonlyacceptedaccounting principles.Thisreviewwasdoneforthereasonof expressinglimitedassurancethatthere are nosinglematerialmodifications.Thisis theproofthatnoalterationwasdoneto thefinancialstatementswith thepurposeforthem to conformto theuniversallyacceptedaccounting principles.

Themasterbudgetis a comprehensivepredictionof thecompany`smanagementexpectsto conducteveryaspectof businessannually,which is their fiscalyear.Itsummarizespredictedactivitythrough thebudgetedincomestatement,a cashbudgetandbudgetedbalancesheet.Thiswill be usedto planandsetperformancesobjectivesalsoto keeptheNestle managementon thesamepage.Therefore,thebusinessof keepingtheCompany profitableis donein tandem. Theoperationbudgetincludesrevenuesandexpensesof day-to-day corefunctionsof theCompany. Revenuesare salesof productsexpensesare thecostsof productssoldincludingoverheadandadministrativecostsdirectlyconnectedto producingtheproducts.In Nestle, operatingbudgetwill be brokento monthlyreportingperiodsto enablethemanagementto planandadjustforvariationsin thestreamsof revenue(Walther etal., 2009, p. 99).

CashflowbudgetallowNestle to examinetheinflow andoutflowof cashon a day-to-day basis.Thisenablesthem to predicttheCompany abilityto streamin morecashthan itpaysout thereforepinpointing shortfalls between expensesandsales.Issuesof overheadcostsaresorted,forinstance,sourcing moneyto coveroverheadcosts.There is an outlineon howtheCompany receivesandspendsmoneyon a corporate scaleencompassingrevenuesfrom corefunctionsplus incomeandcostsfrom capitalexpenditures.Thisis thefinancialbudgetbecausemanagingassets suchas machinery,buildingshavea significanteffecton thefinancialhealthof theCompany. Itenablesthemanagementto leverage on leasing storageoroutsourcing (Walther etal., 2009, p. 99). Staticbudgethaveelementsof constantexpenditureswith variationsin saleslevel (Walther et al., 2009, p. 99). Themanagementexerciseoversightrolesothatsomedepartmentsthat areallocatedfixedamountof moneyought to keeptheir expenditureof theallocatedmoney.Thisconstantkeptwithin thebudgetwill helptheCompany in not overspending on non-core functions.

References

Walther,L. M., &amp Skousen, C. J. (2009). Budgetingand Decision Making.Bookboon.