Budget analysis is a financial management process that involves examining and evaluating an organization’s or individual’s budget to determine whether it is meeting its financial goals and objectives. The analysis typically involves reviewing actual financial performance against the budgeted amounts to identify areas where performance is exceeding expectations or falling short.
Budget analysis can help individuals and businesses gain a better understanding of their financial situation and identify opportunities for improvement. It can help identify areas where expenses can be reduced or reallocated to more productive activities. It can also help identify areas where revenue or income can be increased.
Budget analysis typically involves comparing actual results to the budgeted amounts and identifying any significant variances. This analysis can help identify trends and patterns in financial performance and provide insights into areas where improvements can be made.
Budget analysis is an ongoing process that should be conducted regularly to ensure that financial goals and objectives are being met. It can be a useful tool for both individuals and businesses to help them stay on track and achieve financial success.« Back to Glossary Index