Application of Financial and Budgeting Concepts Essay

Paper Type:  Essay
Pages:  3
Wordcount:  552 Words
Date:  2022-05-23

California Energy Commission is an American public organization that deals with forecasting the future energy needs, supporting renewable energy advancement, the supply of energy and promoting energy efficiency in America. Budgeting and financial management concepts help both public and economic sectors reform and are discussed below.Budgeting is a financial concept that deals with planning and forecasting. The organization has to plan on the number of Kilowatts to release that can be available to the citizens. Forecasting deals with determining whether soon, as the population grows, people will be able to have enough energy for consumption. In the year 2013, the commission embarked on distribution of Ethanol E85 to take advantage of existing fuelling infrastructure. Brent Yacobucci, (2010) stated that the current E85 represented only about 1% of ethanol consumption in the United States. Forecasting has helped the commission to predict emission of greenhouse gas by the year 2020.

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Cash management entails the ability to have the liquid cash for meeting the daily financial obligations of the commission. These daily activities may include power connections, payment of casual workers and fueling the vehicles. If funds are mismanaged, continuity of service provision will be complicated and the commission will not be able to perform its tasks as required. The department handling cash should be regularly audited to reduce chances of mishandling or misuse of money to enable the commission run efficiently.

Financial statements should be analyzed and reported to the various stakeholders to know the commission's status. The financial report should be timely and accurate of the data being released to the public. Reporting is essential to the commission, and the government will identify loopholes and bring those misusing public money to justice.

Capital structure is a critical concept that should be applied to this commission since it will help determine the best form of capital for venture whether debt or equity. This concept deals with how the commission finances its operations and growth using different sources of funds as mentioned by Ghosh, (2012). This concept provides promising finances that enable the commission to run for long without constraints. Technical expertise is also attached to this since when choosing a venture, the commission has to put it into consideration.

The commission should apply the Zero-based budgeting since it answers the questions of how much can be produced and spent and the essential activities that should be addressed. The commission should identify the most critical and crucial actions that should always use fund and calculate the amount. Any project the commission undertakes should clearly define the amount to produce a profit as a result.

Income-based budgeting is another concept that the commission should apply. It deals with budgeting for the income. The commission expenses should be lower than the income. Revenue from any project that the commission run should be geared towards either making the project more modern and efficient or even help support other small projects that are on the same line as additional capital.


In conclusion, the above concepts are applicable at California Energy Commission and should be used to help the organization grow and maintain its duties delivering the best services as far as any form of energy that they offer is concerned.


Brent Yacobucci, . S. (2010). Energy Ethanol. United States: The Capitol Net Inc Copyright.

Ghosh, A. (2012). Capital Structure and Firm Performance. Transaction Publishers.

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