Investor Glossary-zbbInvestor Glossary-zbbInvestor Glossary-zbbInvestor Glossary-zbbInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

ZBB

The HTML to link to this page
 

ZBB, or Zero-Based Budgeting, is a budgeting method where justification is required each time a new budget is prepared. In ZBB, expenditures must be justified during every budgeting period. Under ZBB, budgeting begins with no pre-authorized funds. The ZBB process focuses on the entire budgeting process, unlike the traditional budgeting process that focuses on only incremental changes to the baseline budget. ZBB has several benefits. Under ZBB, the preparer is forced to completely understand an entity's operations to plan for the upcoming year. Under ZBB, the budget preparer becomes knowledgeable about the organization and its operations. ZBB also ensures that budgets are prepared based on current and relevant assumptions. ZBB also has several disadvantages, the most significant being the time and effort involved. ZBB promotes the justification for routine operations and the effects of cyclical trends. ZBB is encouraged for government-related budgets to avoid the assumption that this year's spending should be equivalent to last year's spending and because expenditures under such budgets can easily get out of control.



Rate this ZBB definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: Key Rate Duration, EBITDA, phantom income, debt service coverage, inflation, liquidity ratio, wholly-owned subsidiary, limit order, Zero Cost Collar, FTSE, LIBOR, required rate of return, covered put, 401a, class C shares, diluted share, annual return, APR, stock market close, VIX, current ratio, labor relations, 144a, ex-dividend date, 1035 exchange, cancelled check, per diem, implied volatility, real GDP, minority interest, margin rate, command economy, ex-dividend, quality assurance, irrevocable trust, risk management, in escrow, reverse mortgage, retained earnings, deferred tax, dividends payable, average price per share, option premium, balance sheet, open position, 1031 exchange, stock split, FICO score, deferred revenue


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2015 Investor Glossary - All rights reserved - Terms of Use