Investor Glossary-zero-base budgetingInvestor Glossary-zero-base budgetingInvestor Glossary-zero-base budgetingInvestor Glossary-zero-base budgetingInsightful 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

Zero-base Budgeting

The HTML to link to this page
 

Zero-base budgeting is a budgeting method that management uses which requires them to justify each expense every year. In other words, zero-base budgeting does not consider the priorities and allocations of previous years and how they were beneficial or detrimental that year; zero-base budgeting essentially says that all budget headings have a value of zero - requiring the re-evaluation (justification) of all expenditures. Any new programs, for instance, are placed on equal footing with existing programs, in zero-base budgeting. Zero-base budgeting emphasizes management's responsibility to evaluate, plan and budget effectively. Zero-base budgeting typically requires the approval of senior management and executives, so managers are forced to scrutinize all expenditures in zero-base budgeting to make sure that the top level employees will back the budget itself. Such detailed evaluation means that zero-base budgeting supports comprehensive planning and shared decision-making, which can lead to the more effective and efficient use of company resources.



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


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | 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