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you have been approached by james johnstone for advice on budgeting techniques mr jo 644924

You have been approached by James Johnstone for advice on budgeting techniques. Mr Johnstone has recently inherited a majority shareholding in, and been appointed managing director of, Nicholas Knitwear Ltd (‘NK”). NK is a small, long established family firm which manufactures knitwear for sale to several department stores. It also owns and operates three retail outlets in tourist areas which sell NK products and other gift items. NK is profitable, but Mr Johnstone is concerned that no one seems to know exactly how profitable it could be or should be. The quarterly management accounts report this year”s actual figures compared with last year”s actual figures, with no comment on the differences. Mr Johnstone realises that NK should have budgets against which annual performance can be measured, but has no idea as to how to proceed. Write a report to Mr Johnstone advising him on appropriate budgeting techniques for NK.

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