Surplus

Definition of Surplus

Surplus, in financial terms, refers to the excess of revenue or resources over expenses or liabilities in a given period.

It represents the positive difference between the total income or assets and the total expenditure or obligations, resulting in an accumulation of resources beyond what is needed to meet immediate financial commitments.

Surplus can apply to various financial contexts, such as government budgets, corporate financial statements, trade balances, or investment portfolios, and it indicates a favorable financial position with room for savings, investments, or expansion.

What is Surplus?

Surplus is the amount of resources or funds remaining after all expenses, debts, and obligations have been deducted from the total revenue or assets.

It signifies a favorable financial situation, where income exceeds expenditure, leaving a positive balance. Surplus funds can be used for various purposes, including investing in new projects, paying down debts, building reserves, distributing dividends, or returning value to shareholders.

Surplus is a valuable financial metric for assessing an entity's financial health and capacity to handle contingencies or future growth. It also plays a significant role in economic indicators, trade balances, and fiscal policies of nations and organizations.