Budget and Forecast

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.

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.


FORECAST
The process of analyzing current and historical data to determine future trends.