Difference between budget and forecast

Question

Accepted Answer

Budget is a plan for future income and expenses, while forecast is a prediction of future financial performance.

Budget is a financial plan that outlines expected income and expenses for a specific period of time, usually a year.
Forecast is a prediction of future financial performance based on past performance and current trends.
Budget is more rigid and inflexible, while forecast is more flexible and adaptable to changes.
Budget is used to control spending and ensure financial stability, while forecast is used to anticipate future financial needs and opportunities.
Example: A company creates a budget at the beginning of the year to plan for expected income and expenses. Throughout the year, they use forecasts to adjust their financial plans based on actual performance and market trends.

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