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How to calculate the budget


How to calculate the budget</a>

The budget, whether family, state or corporate, has been and remains the main list of all costs and revenues for the reporting period.

Let us consider its calculation.



The budget is an extremely important and defining document.

It takes into account literally everything related to financial flows, both incoming and outgoing.

Usually it is made for a year. Let's not address to the specifics: whether the budget is a company, a family or something else - the structure does not change significantly.

How to calculate the budget


So, the main ratio, budgeted: income / expenditure.
Carefully and seriously think about what guaranteed costs you have to cover (rent, rent, taxes, etc.), what are the expected revenues (interest, profit, investments, etc.).

Estimate, whether it is necessary and whether you can allocate means for development that can demand repair or replacement in the near future.

It would also be very useful to provide for possible reserve amounts, which will be useful in case of force majeure.

Assess the economic situation, forecasts forInflation, stock exchanges and so on. We must not forget that the calculation should be carried out taking these indexation factors into account during the next year, rather than using the data of the current period, because everything changes. Proceeding from this, it can be concluded that the budget is at least a computational document, but it has a solid share of the forecast in its essence. Therefore, it is possible that there will be adjustments, and by the next reporting period you will be able to compare your calculations with reality and apply the experience gained to the drawing up of a new plan.


As a result, you may get a scarce orSurplus budget - roughly speaking, whether you will be in positive territory or in negative territory at the end of the year. It does not always happen that if you have a deficit, then this is definitely bad. Perhaps it is due to investments that can bring significant profits in the future, beyond the period under review. The same goes for the surplus budget: yes, you still have the money, but think: should not they find an application, especially if you already have a backup article in mind.

How to calculate the budget Was last modified: May 23rd, 2017 By Jeopuoqr
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