Questions:

1. What does the Balance Sheet of a bank give us?

2. What is the largest asset of a bank?

3. What items listed as assets does the balance sheets usually include?

4. What does the income statement record?

5. What items normally constitute the main expenses in a bank's income statement?

6. What is the indication of the bank’s strength?

Budget system

A budget is a detailed plan outlining the obtaining and use of financial and other resources over some given time period. A budget sets forth management's expectations for revenues and, based on those financial expectations, allocates the use of specific resources throughout the firm. It represents a plan for the future expressed in formal quantitative terms. The State Budget is a plan of obtaining and use of financial resources to provide with the functions which are carried out by the state authorities of Ukraine. The act of preparing a budget is called budgeting. The use of budgets to control activities of any organization, village, city or town, as well as a country is known as budgetary control.

The budget system of Ukraine consists of the State Budget of Ukraine, Republican Budget of Crimea, and local budgets. The totality of all budgets is called the master budget (consolidated budget) of Ukraine. The master budget of Ukraine is used to analyze and denote the principles of the state legislation of economic and social development of Ukraine. The master budget is a summary of all phases of the country's plans and goals for the future. It sets specific targets for sales, production, distribution, and financing activities.

Most firms prepare yearly budgets from short-term and long-term financial forecasts. There are usually several budgets established in a firm: an operating budget, a capital budget, a cash budget, a master budget.

An operating budget is the projection of money allocation to various costs and expenses needed to run or operate the business. How much the firm will spend on supplies, travel, rent, advertising, salaries, etc. is determined in this budget.

A capital budget consists of the firm's spending plans: the purchase of such assets as property, buildings, and equipment.

A cash budget is the projected cash balance at the end of a given period (e.g. monthly, quarterly). It is important for managers in borrowing, debt repayment, cash disbursements, and short-term investment expectations.

A master (consolidated) budget ties in all the above mentioned budgets and summarizes the proposed financial activities of the firm.

The budget system (the order) is based on the principles of unity, completeness, authentic information, transparency (visualization) and independence of all budgets involved into the budget system of Ukraine.

The principle of unity means the existence of the single system of computation of revenues and expenses by every chain of the budget system. It is backed by the single legislation base, single set and form of documentation, single monetary system, socio-economic policy and necessary statistic and budget information.