How to Define Static Budgets

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A static budget is a measurement tool used to evaluate the results of a business by looking at the sales, expenses and profits of a business history. Determine whether to pursue a business enterprise by examining the static budget with advice from a certified public accountant in this free video on business and accounting terms.

Part of the Video Series: Business & Accounting Terms
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Let's talk about a static budget. A static budget is a measurement tool, that we use to evaluate the results of the business. At the outset, before we begin our business activity, we look at the history of other businesses, or the history of our own business, and tabulate those results, of sales, expenses, profits. As we pursue the business enterprise, we measure the results against that so called static budget, against the actual results, to understand the variances of the successes and failures, of our business choices.

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