What is this practice and how effective is it?

Rolling forecasts enable managers to anticipate short-term outcomes and therefore influence them. Forecasts are a quantum leap from annual budgets that act as a barrier to fast response. On the one hand, budgets and their periodic revisions focus on the forthcoming year-end; managers use them to take whatever action is required to achieve the agreed-on targets. On the other hand, rolling forecasts provide managers with a moving window of the future that will help them to make strategic decisions, manage cash flows, and set shareholder expectations. But there are many implementation pitfalls that can distort these forecasts and put managers in a worse position than before. We ...

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