Budget

A budget is a list that accounts for all expenses and income for a household, business, government, or other entity. A budget normally projects costs and income for a given period of time. Corporations typically compile a budget in advance of each financial year. Corporate budgets can provide information to investors in at least two ways.

First, when the budget is initially made public, it demonstrates how profitable the company expect to be during the coming year. Second, when the year ends and the actual expenses and income are compared to the figures that were projected in the budget, investors get a good picture of the stability of the company and its ability to forecast its own financial performance.