Budget

Budget

An estimation of the revenue and expenses over a specified future period of time. A budget can be made for a person, a family or a group of people, a business, government, country or multinational organization or just about anything else that makes and spends money. Budgets are a microeconomic concept that show the tradeoff made when one good is exchanged for another.

Notes:

A surplus budget means profits are anticipated a balanced budget means revenues are expected to equal expenses and a deficit budget means expenses will exceed revenue. Budgets are usually compiled and re-evaluated on a periodic basis. Adjustments are made to budgets based on the goals of the budgeting organization. In some cases, budget makers are happy to operate at a deficit, while, in other cases, operating at a deficit is seen as financially irresponsible.

See also: Capital Budgeting, Cash Budget, Revenue, Expense, Zero Based Budgeting

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Budget

A detailed pro forma schedule of financial activity, such as an advertising budget, a sales budget, or a capital budget.