Question

Why is it important to project the first-year financial performance on a monthly basis and the subsequent yearly budgets, on a quarterly basis? Explain.

Answer 1

To determine proper allocation of resources since the business is relatively new.

Step-by-step explanation:

Remember, by using the monthly forcasting method in the first year of operations, it allows for total monthly expenses to be weighed against the total monthly revenue.

However, after gathering some experience from the first year's operations, using the quarterly method would allow for easy comparism of the performance of preceding years. ,