What does an operating budget detail?

An operating budget is primarily designed to outline the forecasted revenues and expenditures necessary for the day-to-day operations of an organization. This type of budget focuses on the ongoing activities and functions that sustain the organization, capturing all the expected income from various sources and estimating all costs associated with maintaining operations, such as salaries, utilities, and supplies.

By detailing these elements, the operating budget helps organizations plan for their financial resources and manage cash flow effectively, ensuring that they can cover operational costs while aiming to achieve their strategic objectives. It is a critical tool for monitoring and controlling financial performance over a specific period, often annually, thus allowing organizations to make informed decisions regarding resource allocation and operational efficiency.

The other options relate to different aspects of financial management, such as capital budgeting for long-term investments, debt management, or contingency planning, but they do not encapsulate the core purpose of an operating budget.