Xiaomi follows kaizen budgeting in China where the company allocates targets that are incremental in nature from last year and receive also more budget to meet the increased targets. Kaizen Budgeting example – Kaizen Budgeting is used for businesses and large corporations that beliefs in continuous improvement. The company hence next year has allocated a budget of $90 million dollars. The actual spend of the department for the year is $80 million in 2017. Now at the end of the year, the company wants to measure the actual spending versus the planned budget which was earlier allocated for the department. XYZ company has allocated a budget of $100 million for its operations departments. Hence the company decided to switch to zero-based budgeting where the company will first identify a proper target for the acquisition and does not look at a ticket size at a first instance since the company operations which they are looking to acquire is niche. After two years for target screening and identification, the company could not identify an appropriate target for the acquisition in the middle east. Zero Based Budgeting – ABC company had a budget of 500 million dollars for an acquisition project in the middle east. Start Your Free Investment Banking Courseĭownload Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others Budgeting ExamplesĮxamples of budgeting are as follows: Example #1 A static Budget is static in nature and does not change frequently whereas a flexible budget is a flexible budget that changes frequently in amount and in priority. There are two major parts of the budget which is static budget and flexible budget. A budget is a tool that is used by the internal management of the company and is not often required by the external parties of the company. The company has to make a list of departments or project the company needs to undertake and need to keep its focus on the things which need immediate capital or capital inflow in order to operate.īudgeting is a very important process and exercise in every organization in the world and budgeting should be looked at as of paramount importance. Every company has a limited or a rationalized budget through which the company needs to prioritize and rationalize their budget allocation criteria. Budgeting is a process of creating an investment idea and objectives budgeting is the allocation of various investments through various departments of the company. The following examples of Budgeting provide an understanding of the different types of budget that an organization can prepare.

Examples of budgets in excel