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Business Definition for: budget
Dictionary of Accounting Terms
budget

quantitative plan of activities and programs expressed in terms of assets, liabilities, revenues, and expenses. Budget participants will be involved in carrying out the plan, or in other quantitative terms such as units of product or service. The budget expresses the organizational goals in terms of specific financial and operating objectives. Advantages of budget preparation are planning, communicating companywide goals to subunits, fostering cooperation between departments, maintaining control by evaluating actual figures to budget figures, and revealing the interrelationship of one function to another.

See also master (COMPREHENSIVE) budget
Dictionary of Finance and Investment Terms
budget

estimate of revenue and expenditure for a specified period. Of the many kinds of budgets, a cash budget shows cash flow, an expense budget shows projected expenditures, and a capital budget shows anticipated capital outlays. The term refers to a preliminary financial plan. In a balanced budget, revenues cover expenditures.

Dictionary of Business Terms
budget

estimate of revenue and expenditure for a specified period. Of the many kinds of budgets, a cash budget shows cash flow, an expense budget shows projected expenditures, and a capital budget shows anticipated capital outlays. The term refers to a preliminary financial plan. In a balanced budget, revenues equal expenditures.

Dictionary of Real Estate Terms
budget

an itemized list of expected income and expenses prepared weekly, monthly, or annually.

Example: Buddy owns a four-plex . His budget is as follows:

TABLE 6
BUDGET
Potential gross revenue: $800 x 4 units x 12 months $38,400
Less: Vacancy and collection @10% -3,840
Effective gross income $34,560
Expenses:
Real estate taxes $5,000
Insurance 2,000
Repairs and maintenance 4,000
Management 22,000
Total expenses -13,000
Net operating income $21,560
See also pro-forma statement
Related Terms:
master (COMPREHENSIVE) budget

plan of activities expressed in monetary terms of the assets, equities, revenues, and costs that will be involved in carrying out the plans. Simply put, a master budget is a set of projected or planned financial statements. It consists basically of a pro forma income statement, pro forma balance sheet, and cash budget. A budget is a tool used for both planning and control. At the beginning of the period, the budget is a plan or standard; at the end of the period, it serves as a control device to help management measure its performance against the plan so that future performance may be improved.

pro-forma statement

(from Latin pro forma, "according to form"). Financial statements showing what is expected to occur, as opposed to actual results.

Example: The broker prepared a pro-forma statement for the prospective purchaser (Table 41). It showed expected cash flows for the property:

TABLE 41
  
PRO-FORMA STATEMENT  
Pro-forma Cash Flow Statement
Next Year, Projected		  
Rental income $10,000
Taxes -$2,000
Utilities -$1,000
Miscellaneous - 500
Subtotal expenses -3,500
Cash flow $6,500
Referring Terms:
balanced budget
balanced budget
Copyright © 2005, 2000, 1995, 1987 by Barron's Educational Series, Inc., Reprinted by arrangement with Publisher.
 Copyright © 2006, 2003, 1998, 1995, 1991, 1987, 1985 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright © 2007, 2000, 1997, 1987, by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright © 2004, 2000, 1997, 1993, 1987, 1984 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
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