Definition: When a business has more inventory than it needs, it is called an inventory surplus. The main scenarios that lead to a surplus inventory are inaccurate forecasting for demand and/or buying items in bulk to get the benefit of economies of scale. Other, more minor, reasons can be changes in market conditions or changes …
Definition: In a budget deficit, expenses are higher than the revenue generated during the same period. In most cases, governments use this term while presenting the budget for the next financial year. A budget deficit is not desired, and to overcome this situation, governments can cut spending or raise taxes until the budget balances, or …
Definition: In a balanced budget, expenses equal the revenue generated in the same duration. Usually, governments or public sector companies use this term to show their financial position to stakeholders. In a balanced budget, there is no budget surplus or budget deficit. In a budget surplus, expenses are lower than the revenue; in a budget …
Definition: When income exceeds the expenditures in the same duration, it is called a budget surplus. Businesses and governments use this term, but individuals are more likely to use the term “savings.” A budget surplus shows the business is doing well and funds are managed effectively. A budget surplus is a good thing for businesses …