ECONOMICS

Detailed explanation-1: -Combining an operating budget with a financial budget, a master budget is typically prepared for the upcoming year, and it can also be a useful tool when creating a strategic plan for your business.

Detailed explanation-2: -A master budget is a company’s central financial planning document. It typically covers a full fiscal year and includes “lower-level” budgets-like a sales budget and a labor budget-cash flow forecasts, financial statements, and a financial plan.

Detailed explanation-3: -An annual budget lays out a company’s projected income and expenses for a 12-month period. The process of creating an annual budget involves balancing out a business’ sources of income against its expenses.

Detailed explanation-4: -The master budget is a comprehensive financial plan that encompasses all aspects of a company’s operations. It includes both short-term and long-term goals, and sets forth a plan of action for achieving them. The budget is usually prepared on an annual basis, but can also be done on a quarterly or monthly basis.

Detailed explanation-5: -1. Long-Term Budget: Long-term budgets are prepared for a period exceeding one year.