Baseline

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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.

BREAKING DOWN '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.

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