Question

List and describe the four key steps in financial forecasting.

Answer 1

Answer :- Steps of Financial Forecasting

1. Use Multiples Scenarios :- First we have to find the multiple plans of forecasting. It can be to use the multiple forecasts.

2. Start with Expenses :- As you all know that the prediction of expenses is easy as compared to predict the revenues. Now you forecast and base building with the Fixed Expenses first like rent salary etc.

3. Identify your assumptions :- Now you can take assumptions about the market that the market will grow or shrink in future. then do the next step.

4. Outline each step in your sales process :- Now in this step do the revenue projections and the cash management estimates . Identify the market where the product is sold . Set the distribution management or supply chain.

5. Find Comparisons

6. Constantly Reassess