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. Benchmark

    A standard against which the performance of a security, mutual ...
  3. Tracking Error

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

    The amount of money that a company actually receives during a ...
  5. Revaluation

    A calculated adjustment to a country's official exchange rate ...
  6. Lean Six Sigma

    Lean Six Sigma is a managerial approach that combines Six Sigma ...
Related Articles
  1. What Are A Stock's
    Investing Basics

    What Are A Stock's "Fundamentals"?

  2. Introduction To Fundamental Analysis
    Markets

    Introduction To Fundamental Analysis

  3. Understanding S Corporations
    Investing Basics

    Understanding S Corporations

  4. Top Receipts To Keep In Your Files
    Budgeting

    Top Receipts To Keep In Your Files

comments powered by Disqus
Hot Definitions
  1. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  4. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  5. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center