What is a budget?

A budget is defined as a financial plan that outlines expected revenues and expenses over a specific period, typically used for a business, organization, or individual. This comprehensive overview assists in anticipating financial conditions, managing resources, and ensuring that spending aligns with available income.

By detailing anticipated income (revenues) and the costs associated with running operations (expenses), a budget provides a framework for tracking financial performance and making informed decisions. It ensures that an entity does not overspend and helps in identifying areas where costs may need to be controlled or where additional revenue may be necessary.

In contrast, the other options provided do not encapsulate the essence of a budget. Employee salaries and wages, while an important aspect of overall expenses, do not represent the comprehensive financial planning that a budget embodies. A report on business competition and an analysis of market trends focus on external factors that influence business operations but do not involve the internal financial planning necessary for maintaining operational efficiency and effectiveness.