A Level Business Studies - Factors that influence the size of a budget for the next financial year
Explain the factors that might influence the size of Tregory Growers Ltd’s budget for marketing expenditure for the next financial year. One factor that might influence the size of Tregory Growers’ budget for marketing expenditure is the financial position of the company. The Director of Finance says that they are already increasing their borrowing by £10m and already have a shortage of working capital. They also have current liabilities worth £9.4 million. This is likely to affect Tregory Growers’ marketing budget because it hints at potential cash flow issues and could lead to low profitability. This may call for the marketing expenditure to be restricted in order to retain a strong financial position going into the future. This said, the company could take a risk and have a large marketing budget with the hopes it would pay off and translate into profit; appendix A shows a weak positive correlation because marketing budget size and sales which may push Tregory Growers to see it ...