Briefly summarise the findings of Penman and Sougiannis (1998) concerning the ex-post performance of the abnormal earnings method, the dividend discount model and the discounted cash flow method. b) Explain what Business Strategy Analysis is and why it is a prerequisite for understanding the results of our ratio analysis, and for making good forecasts in the context of our Prospective Analysis.

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.