When creating a budget for your new business, which of the following should you include?

• A. Historical stock prices of unrelated companies
• B. Personal expenses unrelated to the business
• C. Only the amount of cash on hand at the start of the business
• D. Projected revenues, expected expenses, and planned investments in securities

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the purpose of a business budget. A budget is a financial plan that outlines expected revenues, expenses, and investments to ensure the business operates efficiently and achieves its goals.
2. Step 2: Identify the key components of a business budget. These typically include projected revenues (income from sales or services), expected expenses (costs such as rent, utilities, salaries, and supplies), and planned investments (such as purchasing equipment or investing in securities).
3. Step 3: Exclude irrelevant information. Historical stock prices of unrelated companies and personal expenses unrelated to the business should not be included in the business budget, as they do not pertain to the financial operations of the business.
4. Step 4: Include only relevant financial data. The budget should focus on the amount of cash on hand at the start of the business, projected revenues, expected expenses, and planned investments. These elements provide a clear picture of the financial health and future planning of the business.
5. Step 5: Ensure the budget is realistic and flexible. Use reasonable assumptions for revenues and expenses, and allow room for adjustments based on actual performance or unforeseen circumstances.