Definition:

A budgeted balance sheet is a projected financial statement that shows a company’s expected financial position at a future point in time. It’s based on the company’s budget and forecasts for future income and expenses.

Key components of a budgeted balance sheet:

  • Projected assets: The expected value of the company’s assets at the end of the budget period.
  • Projected liabilities: The expected amount of the company’s liabilities at the end of the budget period.
  • Projected equity: The expected value of the company’s equity at the end of the budget period.

Why are budgeted balance sheets important?

  • Financial planning: Budgeted balance sheets are essential for financial planning, as they help companies to forecast their future financial position.
  • Decision-making: They can be used to make informed decisions about investments, financing, and other strategic matters.
  • Performance evaluation: Budgeted balance sheets can be compared to actual results to assess the effectiveness of the company’s financial planning and management.

In essence, a budgeted balance sheet is a projected financial statement that shows a company’s expected financial position at a future point in time, and it’s a valuable tool for financial planning and decision-making.