You can take this from a bottoms up or top down perspective.
From a bottoms up point of view, if you are a departmental manager, you will be feeding up the chain of command inputs which get aggregated and aggregated to the top line. You must make realistic inputs or the budget, for example, will be simply a "house of cards." Also, you must manage your cash flow resources meticulously and according to plan. If you over spend then the company's financial positioning will be in jeopardy.
From a top down perspective, you receive guidance from corporate and must stay within those guidelines. You know that all departments like yours will be receiving their share of resources and hence all will be working together for the common good of shareholders.
These financial tools are the glue that holds together the collective financial thinking of the firm.
Bob
As an Adjunct Professor, I do not have influence or control of the financial statements or activities noted in the question. However, as a stockholder I have a strong interest in the financial health of the college. Since we are a publicly traded company I have access to both Annual and Quarterly Reports. In these reports I examine the Balance Sheet, Income Statement, and Cash Flow Statement to gauge the financial health of the college. In these reports I also read carefully the statements of the leaders of the school and often get valuable information from the notes contained in the reports. I keep back copies of the reports to see if what was targeted in past editions were address or transpired as a barometer of future activities by the college leadership in terms of improvements in technology, curriculum changes, and potential acquisitions.
Hi Donald,
Thanks! it is particularly interesting that you look at potential trends from the annual reports. What has been targeted in the past, as well as results, can be, as you affirmed, an indicator of future financial health and initiatives.
Jay Hollowell
I understand more how the budget is a both provides structure and reacts to support the administration.
I am eager to apply some of this course work to budget planning, but will need more study to put some of the "bigger concepts" into practice.
