GROUP 4 SECTION A

AOL EVALUATION

3A
AISHWARI
YA
UPASANA

1. What was the most appropriate tool/model/theory you found applicable to the situation or problem you
analysed?

This model helps you predict which opportunities are more likely to close based on demographic and behavioral
data.
By looking at demographic and behavioral data, we can get a better sense of the probability to close and the
expected value of the deal.
n this model, we look at the characteristics of businesses that have closed deals in the past. Then, we look for the
same characteristics in our pool of potential customers.
This second layer of analysis is called lead scoring. Usually, Sales and Marketing teams work together to define
a lead scoring system and set it up.
Once you have your scoring system in place you can calculate the estimated value of each opportunity in your
pipeline.
Expected Value of Opportunity = Average Sale Price * Average Close Rate.

2.Mention the crux of the problem and your critical analysis of the same.

Another problem that many budget owners face during the multi-layered budgeting process is dealing with
deadlines and unpredicted changes. In what should be a simple fix, any modification or adjustment to a budget
results in a complicated back and forth tango of redoing numbers, responding to questions, and re-sending
spreadsheets.This leads to improper calculation which is a major roadblock to proper budgeting.

3.What is your recommendation on the key critical issues faced in budgeting.

Calculating how much money will be generated from your sales activities on a monthly, quarterly, and yearly
timeframe is a must if you want your business to be successful. So many failed businesses occur due to not
calculating revenue or they overestimate their revenue and increase their cost that was estimated.
This is why it is important to follow these given tips when projecting revenue:
Forecast revenue – you want to have a goal for your business that your entire team understands needs to be
worked towards.
Use conservative revenue estimates – do not project generating a million in your first year of business,
especially without having an established customer base.
Use previous year’s figures as a starting point – if you made Rs200k in revenue the previous year, an estimate
of Rs350k would be a safe projection to make if you expect growth to occur.

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GROUP 4 SECTION A

effective budgeting and fiscal planning should bring

to the table.

18A
DIVYANSHI
3.What is your recommendation on the key critical
MALHOTRA issues faced in budgeting.

Easily build, organize, and report on your budgets on

a centralized platform for owners and contributors of
the budgeting process. This would prevent working in
silos.
Overstate costs in order to avoid underestimating
expenditure
1. What was the most Marketing costs are very easy to underestimate
appropriate If a new business, include startup costs
tool/model/theory you found
applicable to the situation Variable costs are usually associated with sales
or problem you analysed? By doing the proper research, you are better able to
plan for the costs of operating your business. This
Incremental budgeting process helps you make informed decisions that allow
takes last year’s actual figures and adds or subtracts a your business to operate without any unexpected
percentage to obtain the current year’s budget. It is financial surprises.
the most common method of budgeting because it is
simple and easy to understand. Incremental
budgeting is appropriate to use if the primary cost
drivers do not change from year to year. However,
there are some problems with using the method:
It is likely to perpetuate inefficiencies. For example,
if a manager knows that there is an opportunity to
grow his budget by 10% every year, he will simply
take that opportunity to attain a bigger budget, while
not putting effort into seeking ways to cut costs or
economize.
It is likely to result in budgetary slack. For example,
a manager might overstate the size of the budget that
the team actually needs so it appears that the team is
always under budget.
It is also likely to ignore external drivers of activity
and performance. For example, there is very high
inflation in certain input costs. Incremental
budgeting ignores any external factors and simply
assumes the cost will grow by, for example, 10% this
year.

2.Mention the crux of the problem and your critical

analysis of the same.

Between all the time and resources that the 6

budgeting problems above consume, the total cost of
many annual budgeting programs can add up. In
addition to the labor costs of inefficient processes,
many companies don’t experience the value that

2
 32A
MUNMUN
A 3.What is your recommendation on the key critical
MOHANTY issues faced in budgeting.

Calculating how much money will be generated from

1. What was the most appropriate tool/model/theory
you found applicable to the situation or problem you
analysed?
This forecast model needs analysis of historical sales
data from each of your lead sources. Then, you can
use those data points to create a forecast based on the
value of each source.
The beginning of a buyer’s journey can tell us a lot
about how that journey will end.
By assigning a value to each of your lead sources or
types, you can get a better sense of the probability for
each of those leads to turn into revenue.
For this model, you’ll need the following metrics:
• Leads per month for the previous time period
• Lead to customer conversion rate by lead
source
• Average sales price by source.
your sales activities on a monthly, quarterly, and
yearly timeframe is a must if you want your business
to be successful. So many failed businesses occur
due to not calculating revenue or they
overestimate their revenue and increase their cost that
was estimated.
This is why it is important to follow these given tips
when projecting revenue:
Forecast revenue – you want to have a goal for your
business that your entire team understands needs to be
worked towards.
Use conservative revenue estimates – do not project
generating a million in your first year of business,
especially without having an established customer
base.
Use previous year’s figures as a starting point – if
you made Rs200k in revenue the previous year, an
estimate of Rs350k would be a safe projection to
make if you expect growth to occur.

2.Mention the crux of the problem and your critical

analysis of the same.

There are a ton of moving parts between an entire

company before, during, and after the budgeting
process. Each stage requires input from budget
creators, contributors, and approvers but many
companies don’t have a tool that helps them
collaborate. They end up budgeting in silos, with no
alignment with other departments or towards the end
goal.

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 41A 3.What is your recommendation on the key critical
RISHABH
A
issues faced in budgeting.

DROLIA
You will have to deal with customers who make
payments beyond the stated terms of the invoice. This
affects your cash flow projections because missed
payments lead to no cash flow into your business.
Unreliable players should be dealt with in the
following ways:
Allows for late payments in the revenue column –
this should only be allowed to occur no more 3 times,
even if they are a big client because their products and
services are expensive to
Allow for bad debt – you need to have an amount set
aside for how much debt will be allowed to occur
1. What was the most appropriate tool/model/theory based upon payments not being made at all
you found applicable to the situation or problem you
analysed? Create business policies to deal with late payment
– it should be communicated that late fees
As one of the most commonly used budgeting
methods, zero-based budgeting starts with the
assumption that all department budgets are zero and
must be rebuilt from scratch. Managers must be able
to justify every single expense. No expenditures are
automatically “okayed”. Zero-based budgeting is
very tight, aiming to avoid any and all expenditures
that are not considered absolutely essential to the
company’s successful (profitable) operation. This
kind of bottom-up budgeting can be a highly effective
way to “shake things up”.
The zero-based approach is good to use when there is
an urgent need for cost containment, for example, in
a situation where a company is going through a
financial restructuring or a major economic or market
downturn that requires it to reduce the budget
dramatically.
Zero-based budgeting is best suited for addressing
discretionary costs rather than essential operating
costs. However, it can be an extremely time-
consuming approach, so many companies only use
this approach occasionally.

2.Mention the crux of the problem and your critical

analysis of the same.

Monitoring and adjusting your budget throughout the

year is a highly efficient business practice that leads
to higher returns and improved productivity.
Unfortunately, it’s not used by many companies due
to technology restrictions and the manual labor
required to merge actuals and budgets.