A long-range budget is a financial plan that extends for more than one year into the future. This type of budget typically covers a five-year period and is focused on the strategic direction of the business. The orientation of this budget is toward the following areas:
- New product planning
- Capital investments
- Risk management
Since changes in competition levels and the business cycle make it difficult to plan this far into the future, the long-range budget typically aggregates much of the information found in an annual budget into a smaller number of line items.