Fundamentals of Financial Management, Third Edition

22

Financial Forecasting

OBJECTIVES

To explain the techniques of forecast of a single variable

To describe the process of complete forecast of a firm’s financial position using both the cashflow approach and the balance-sheet approach

The financial analysis discussed in the foregoing chapters of the present part of the book, is based on the past and current financial performance. Interpretation of the past and current financial data is no doubt important, but it is not sufficient. A firm has to plan for future activities. Planning for the future requires an estimate and an interpretation of future financial data. In fact, the very goal of a firm is to have a continued growth of its activities. It intends to capture a growing share of the ...