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Hello,
My question is in chapter 5, we are comparing actual data with budgets and forecast separately. Budgets is made with help of forecast so what is need to compare two of them. We can compare anyone?
Reply ASAPChapter 5 of what?
Usually actual is compared to budget to see if you are doing better in worse than planned.
As you say, budgets are derived from forecasts so I am not sure what point is being made by your text.
Hello Ken,
Chapter Five in BPP study text for MA2 (Information for Comparison)
We are comparing forecast and budget with actual data in the very start of chapter. I want to know what is use of comparing two things which are interrelated.
I couldn’t attach screenshot, otherwise would have highlighted.I don’t have sccess to that book.
As I said, budgets are derived from forecasts. If the forecast changes, usually the budget would be updated. However, some businesses might leave the original budget unchanged so that results there and the forecadt resulds diverge. Actual results can be compared to both:
1 To see how actuals compare to original hopes
2 To see how actuals compare to revised expectations.
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