Baseline

AAA

DEFINITION of 'Baseline'

A benchmark that is used as a foundation for measuring or comparing current and past values. For example, a company wanting to measure the success of one of its product lines can use the number of units sold during the first year as a baseline from which to evaluate subsequent sales growth. In business, baselines and benchmarks serve a similar purpose.

INVESTOPEDIA EXPLAINS 'Baseline'

A baseline is an initial value that can be used to compare past, current and projected future values. The baseline can be considered the starting point against which all future values are measured. In budgeting, the baseline is the point of reference for evaluating the budgetary effects of projected changes in revenues and spending.

RELATED TERMS
  1. Base-Year Analysis

    1. The analysis of economic trends in relation to a specific ...
  2. Tracking Error

    A divergence between the price behavior of a position or a portfolio ...
  3. Revenue

    The amount of money that a company actually receives during a ...
  4. Benchmark

    A standard against which the performance of a security, mutual ...
  5. Revaluation

    A calculated adjustment to a country's official exchange rate ...
  6. Occupational Safety And Health ...

    Law passed in 1970 to encourage safer workplace conditions in ...
Related Articles
  1. Investing Basics

    What Are A Stock's "Fundamentals"?

    The investing world loves to talk about fundamentals, but do you know what it means?
  2. Markets

    Introduction To Fundamental Analysis

    Learn this easy-to-understand technique of analyzing a company's financial statements and reports.
  3. Investing

    What's a Debit Note?

    A debit note is a document used by a seller to inform a purchaser of a dollar amount owed. As the name indicates, it is a note from the seller that a debit has been made to the purchaser’s account. ...
  4. Professionals

    What does C-Suite Mean?

    C-Suite is a slang term used to describe the highest level senior executives of a corporation. This is the decision-making, power center of a company. These individuals are usually paid well, ...
  5. Investing

    What's a Monopolistic Market?

    A monopolistic market has a significant number of characteristics of a pure monopoly. Though there may be more than one supplier, the market has high prices, suppliers tightly control availability ...
  6. Professionals

    What's Human Capital?

    Human capital is a company asset, but it’s not listed on the balance sheet. Human capital is all of the creative skills and knowledge embodied in the employees of a company -- skills that bring ...
  7. Investing

    What's Capitalization?

    Capitalization has different meanings depending on the context.
  8. Investing

    Deferred Tax Liability

    Deferred tax liability is a tax that has been assessed or is due for the current period, but has not yet been paid. The deferral arises because of timing differences between the accrual of the ...
  9. Investing

    Who are Stakeholders?

    “Stakeholder” is used in commerce to describe any party who has an interest in a business or enterprise. Traditionally, stakeholders in a corporation are shareholders, employees, customers and ...
  10. Investing

    Cost and Freight (CFR)

    Cost and freight, called CFR, is a trade term between a buyer and seller. CFR requires the seller to arrange for the transport of goods by sea to the required port. It also requires the seller ...

You May Also Like

Hot Definitions
  1. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  2. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  3. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  4. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  5. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  6. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
Trading Center