Different way of looking at it. Budgets are more like setting enterprise or department-wide financial targets.
If you want something more comparable between a company's spending and a family's budget (where they account for every dollar), look at the Statement of Cash Flow. Money comes in from operations (work), some comes in through financing (loans), some goes out the door when you buy new assets to make more money later on (car) then whatever is left over can get put into retained earnings (savings).
MildThinness t1_j2e6bby wrote
Reply to comment by angrybird7677 in ELI5: Why do companies require annual budget be spent 100%? by angrybird7677
Different way of looking at it. Budgets are more like setting enterprise or department-wide financial targets.
If you want something more comparable between a company's spending and a family's budget (where they account for every dollar), look at the Statement of Cash Flow. Money comes in from operations (work), some comes in through financing (loans), some goes out the door when you buy new assets to make more money later on (car) then whatever is left over can get put into retained earnings (savings).