Investor Glossary-zbbInvestor Glossary-zbbInvestor Glossary-zbbInvestor Glossary-zbbInsightful stock market charts - Click here
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


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

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