ZERO BASED BUDGET Definition

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ZERO BASED BUDGET is where the expenses or costs of the prior year are not taken into consideration when establishing expense or budgetary levels looking forward. Each expense category starts from zero. All expenses or cost levels within the budget must be justified or re-justified as being necessary; thus "zero-base".

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SALES is the total amount sold within a stipulated time period, usually 12 months. Sales is usually expressed in monetary terms but can also be in total units of stock or products sold.

DIT is Depreciation, Interest and Taxes.

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