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Financial Terms | |
operating budget |
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Definition of operating budgetoperating budgeta budget expressed in both units and dollars
Related Terms:financial budgeta plan that aggregates monetary details Activity-based budgetingA method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing. activity-based budgeting (ABB)planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and Annual fund operating expensesFor investment companies, the management fee and "other expenses," Balanced-Budget MultiplierThe multiplier associated with a change in government spending financed by an equal change in taxes. BudgetA detailed schedule of financial activity, such as an advertising budget, a sales budget, or a capital budget. BudgetA plan expressed in monetary terms covering a future period of time and based on a defined ![]() budgeta financial plan for the future based on a single level BudgetA set of interlinked plans that quantitatively describe a company’s projected Budget cycleThe annual period over which budgets are prepared. Budget deficitThe amount by which government spending exceeds government revenues. Budget DeficitThe excess of government spending over tax receipts. budget manuala detailed set of documents that provides information budget slackan intentional underestimation of revenues budget variancethe difference between total actual overhead Budgetary controlThe process of ensuring that actual financial results are in line with targets – see variance budgeted costa planned expenditure budgetingthe process of formalizing plans and committing Capital budgetA firm's set of planned capital expenditures. capital budgetmanagement’s plan for investments in longterm capital budgetList of planned investment projects. Capital budgetingThe process of choosing the firm's long-term capital assets. capital budgetingRefers generally to analysis procedures for ranking Capital BudgetingThe process of ranking and selecting investment alternatives and capital budgetinga process of evaluating an entity’s proposed Capital budgetingThe series of steps one follows when justifying the decision to purchase capital budgeting decisionDecision as to which real assets the firm should acquire. Cash budgetA forecasted summary of a firm's expected cash inflows and cash outflows as well as its cash flow from operating activities, or cash flow from profitThis equals the cash inflow from sales during the period minus the cash Cash Flow Provided by Operating ActivitiesWith some exceptions, the cash effects of transactions Consolidated Omnibus Budget Reconciliation Act (COBRA)A federal Act continuous budgetinga process in which there is a rolling degree of operating leveragea factor that indicates how a percentage change in sales, from the existing or current degree of operating leverage (DOL)Percentage change in profits given a 1 percent change in sales. Flexible budgetA method of budgetary control that flexes, i.e. adjusts the original budget by applying standard flexible budgeta presentation of multiple budgets that imposed budgeta budget developed by top management Incremental budgetA budget that takes the previous year as a base and adds (or deducts) a percentage to arrive at master budgetthe comprehensive set of all budgetary schedules Net operating lossesLosses that a firm can take advantage of to reduce taxes. Net operating marginThe ratio of net operating income to net sales. operating activitiesIncludes all the sales and expense activities of a business. Operating cash flowEarnings before depreciation minus taxes. It measures the cash generated from operating cash flowSee cash flow from operating activities. Operating Cash FlowIncome available after the payment of taxes, plus the value of the Operating cycleThe average time intervening between the acquisition of materials or services and the final Operating EarningsA term frequently used to describe earnings after the removal of the Operating expenseAny expense associated with the general, sales, and administrative OPERATING EXPENSESThe total amount that was spent to run a company this year. Operating ExpensesThe amount of money the company must spend on overhead, distribution, taxes, underwriting the risk and servicing the policy. It is a factor in calculating premium rates. Operating exposureDegree to which exchange rate changes, in combination with price changes, will alter a Operating incomeThe net income of a business, less the impact of any financial activity, Operating IncomeA measure of results produced by the core operations of a firm. It is common Operating leaseShort-term, cancelable lease. A type of lease in which the period of contract is less than the Operating leaseThe rental of an asset from a lessor, but not under terms that would Operating LeaseOne where the risks and benefits, as well as ownership, stays with the lessor. Operating leverageFixed operating costs, so-called because they accentuate variations in profits. operating leverageA relatively small percent increase or decrease in operating leveragethe proportionate relationship between operating leverageDegree to which costs are fixed. Operating Line of CreditA bank's commitment to make loans to a particular borrower up to a specified maximum for a specified period, usually one year. Operating LoanA loan advanced under an operating line of credit. Operating profitThe profit made by the business for an accounting period, equal to gross profit less selling, finance, administration etc. expenses, but before deducting interest or taxation. operating profitSee earnings before interest and income tax (EBIT). Operating profit marginThe ratio of operating margin to net sales. Operating riskThe inherent or fundamental risk of a firm, without regard to financial risk. The risk that is operating risk (business risk)Risk in firm’s operating income. participatory budgeta budget that has been developed Planning, programming and budgeting system (PPBS)A method of budgeting in which budgets are allocated to projects or programmes rather than to responsibility centres. Priority-based budgetA budget that allocates funds in line with strategies. program budgetingan approach to budgeting that relates rolling budgetsee continuous budgeting Rolling budgetsA method of budgeting in which as each month passes, an additional budget month is added such that there is always a 12-month budget. Short-run operating activitiesEvents and decisions concerning the short-term finance of a firm, such as zero-base budgetinga comprehensive budgeting process Zero-based budgetingA method of budgeting that ignores historical budgetary allocations and identifies the costs that are necessary to implement agreed strategies. margin of safetythe excess of the budgeted or actual sales Relevant rangeThe upper and lower levels of activity within which the business expects to be operating within the short-term planning horizon (the budget period). Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |