Surplus

AAA

DEFINITION of 'Surplus'

The amount of an asset or resource that exceeds the portion that is utilized. A surplus is used to describe many excess assets including income, profits, capital and goods. A surplus often occurs in a budget, when expenses are less than the income taken in, or in inventory when fewer supplies are used than were retained.

INVESTOPEDIA EXPLAINS 'Surplus'

A surplus isn't always a positive outcome. In some cases, when a manufacturer anticipates a high demand for a product that it produces and makes more than it sells during that time period, it can have a surplus inventory which may, if it's deep enough, create a financial loss for that quarter or year. When the surplus is of a perishable commodity, such as grain, it could result in a permanent loss, or a write-down as the inventory becomes bad.

RELATED TERMS
  1. Income

    Money that an individual or business receives in exchange for ...
  2. Benchmark Surplus

    Benchmark surplus is an insurance term that refers to the amount ...
  3. Treasury Budget

    Data released by the U.S. Treasury on a monthly basis that accounts ...
  4. Asset

    1. A resource with economic value that an individual, corporation ...
  5. Liability

    A company's legal debts or obligations that arise during the ...
  6. Profit

    A financial benefit that is realized when the amount of revenue ...
Related Articles
  1. Exploring The Current Account In The ...
    Economics

    Exploring The Current Account In The ...

  2. What Is The Balance Of Payments?
    Economics

    What Is The Balance Of Payments?

  3. Understanding Capital And Financial ...
    Bonds & Fixed Income

    Understanding Capital And Financial ...

  4. Microeconomics
    Personal Finance

    Microeconomics

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center