Question
Differentiate between budget and forecast.
| Basis for comparison | Budget | Forecast |
| Meaning | A budget is a financial plan expressed in quantitative terms, prepared by the management in advance for a pre defined period. | It is the estimation of future trends and outcomes, based on the past and present data. |
| What it contains? | It is the financial expression of a business plan or target. | It is the prediction of upcoming events or trends in business, on the basis of present business conditions. |
| Targets | Budget sets targets | Forecast does not set any target |
| What it estimates? | What business wants to achieve | What business will achieve |
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