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Planned and Actual Saving and Investment Difference
Various firms and households make savings and investments that influence the economy in general. Planned savings and investments are the amounts that the companies intend to save or invest during a given period. Actual savings and investments are the quantities that are retained and invested during a specific period. These concepts differ because the former introduces the intended and desired amounts at the beginning of a period, while the latter displays the actual numbers calculated at the end.
The difference between planned and actual savings and investments concerns the unexpected changes that might happen in an organization or a household. Although firms design plans that include their intentions concerning the strategy of leaving specific amounts untouched and investing, some unexpected events might alter the situation. Accordingly, the organizations might save and invest different amounts than those they planned at the beginning of a period.
The second component that differentiates these concepts is the date when the firms can identify these quantities. Mainly, the planned amounts are presented at the beginning of the period when the organizations decide what quantities they plan to use for such purposes. The actual savings and investments, on the other hand, can be calculated at the end of the period when the situation can be analyzed, considering the unexpected profits, interest rate changes, and production capacity.
Thus, the planned and actual savings and investments vary because they present the quantities that differ according to the changes in a company or a household and the time when they are introduced. The planned amounts reveal the intentions of an organization initially. The actual numbers display the real situation, including the changes that might have happened during the period in an economy and an organization.
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