The Master Budget - Definition

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Master budget - a financial plan of an organization for the coming year or other planning period.  It generally culminates in a cash budget, a budgeted income statement, and a budgeted balance sheet.

The master budget is also called the static budget.
The master budget reflects management’s best guess as to the sales levels, production and cost levels, income, and cash flows anticipated for the coming year.
Developing a master budget is a dynamic process that ties together goals, plans, decision making, and performance evaluation.

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