Types of Budgets

Print this page

Budget categories

Three different budgets, representing the three budget categories

There are different types of budgets for different purposes. Some of the main types of budgets include:

  • Operating budgets reflect day-to-day expenses and depreciation (the current portion of capitalized expenses). They typically cover a one-year period.
  • Capital budgets outline planned outlays for investments in plant, equipment, and product development. Capital budgets may cover periods of three, five, or ten years.
  • Cash budgets plot the expected cash balances the organization will experience during the forecast period, based on information provided in operating and capital budgets. Cash budgets are prepared by the finance department and are critical to ensuring that the company has sufficient liquidity (cash and credit) available to meet expected cash disbursements.

Click here to exit the program. Warning, this will close your session. You will be able to return to the course, but any evaluation of your progress/performance will not count after you have clicked this button.