Finance
Flexible Budget for Yum Brands Inc.
Flexible budgeting allows a firm to look at different potential scenarios, often this may be undertaken for an optimistic, pessimistic and most likely scenario. Firms will often undertake forecasting exercises; these may be based on complex approaches to assess likely demand, for example, considering past patterns of sales, the impact advertising they will have and other factors such as the influence of the economic climate, competition and social factors. However, forecasts are unlikely to be fully accurate, the development of a flexible budget allows the firm to look at different scenarios, and create a more flexible approach towards planning. This can be particularly important when the firm is planning for a longer period of time, such as a full financial year, this can be seen by preparing a flexible budget for a well-known company. Yum! Brands is a large corporation which develops, operates and franchises a wide range of restaurants, including KFC, Taco Bell and Pizza Hut. The firm may be argued as particularly sensitive to economic influences as the products and services sold are subject to discretionary spending, and heavily influenced by the level of disposable income, and social fashions and trends and the actions of competitors.
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