Assesment 1 – BSBFIM501A Samsung
BSBFIM501 Manage Budgets and Financial Plan
Task 1 – Written Report
Samsung was founded by Lee Byung-chul in 1938 as a trading company. Over the next three decades, the group diversified into areas including food processing, textiles, insurance, securities and retail. Samsung entered the electronics industry in the late 1960s and the construction and shipbuilding industries in the mid-1970s; these areas would drive its subsequent growth. Following Lee’s death in 1987, Samsung was separated into four business groups – Samsung Group, Shinsegae Group, CJ Group and Hansol Group. Since 1990s, Samsung has increasingly globalized its activities and electronics, particularly mobile phones and semiconductors, have become its most important source of income.
Samsung Electronics (the world’s largest information technology company measured by 2012 revenues, and 4th in market value), Samsung Heavy Industries (the world’s 2nd-largest shipbuilder measured by 2010 revenues), and Samsung Engineering and Samsung C&T (respectively the world’s 13th and 36th-largest construction companies). Other notable subsidiaries include Samsung Life Insurance (the world’s 14th-largest life insurance company), Samsung Everland (operator of Everland Resort, the oldest theme park in South Korea) and Cheil Worldwide (the world’s 15th-largest advertising agency measured by 2012 revenues).
As stated in its new motto, Samsung Electronics’ vision for the new decade is, “Inspire the World, Create the Future.”
This new vision reflects Samsung Electronics’ commitment to inspiring its communities by leveraging Samsung’s three key strengths: “New Technology,” “Innovative Products,” and “Creative Solutions.” — and to promoting new value for Samsung’s core networks — Industry, Partners, and Employees. Through these efforts, Samsung hopes to contribute to a better world and a richer experience for all.
As part of this vision, Samsung has mapped out a specific plan of reaching $400 billion in revenue and becoming one of the world’s top five brands by 2020. To this end, Samsung has also established three strategic approaches in its management: “Creativity,” “Partnership,” and “Talent.”
Samsung is excited about the future. As we build on our previous accomplishments, we look forward to exploring new territories, including health, medicine, and biotechnology. Samsung is committed to being a creative leader in new markets and becoming a truly No. 1 business going forward.
The operating budget is the organization’s annual financial plan that shows expected revenues and costs for current operations. It supports all current program activities and related services.
A cash budget details short-term cash inflows and outflows and is used in conjunction with the operating budget to synchronize expenses. This allows for financial management to ensure the availability of cash for current expenses. The cash budget also functions as a tool to determine cash shortages or overages.
The capital budget details the sale and acquisition of assets. With a capital budget, the organization can plan the optimal time to purchase long-term assets and to determine the best method of financing.
Grant / Contract Budget
The grant and contract budget is specific to each particular grant program. Grantmakers may stipulate that an organization establish a specific budget unique to the grant proposal and separate from an organization’s overall operating budget.
The executive director and Project director(s) naturally play a significant role in the budget process, but staff members who have responsibility for adhering to budgets should also play a role in creating those budgets. It builds buy-in and the process is informed by those with direct experience. Unless you have a board functioning as staff, usually staff members know more about operating details than board members, even very involved ones. In general, it is probably more efficient for staff to create the early drafts of budgets and use the time of finance committee members to review and vet the proposed drafts.
They are involved in all budgets.
•Materials and utilities budget
•Revenue and expense budget
•Capital expenditure budget
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