22.1 FORECAST OF SINGLE FINANCIAL VARIABLE
While forecasting the total financial condition of the firm, the first step is to forecast individual financial variables. These forecasts are then combined into a forecast of the complete balance sheet. In the present section, the various approaches to the forecast of individual variables will be dealt with, while the succeeding section will show how they are combined into an integrated forecast.
22.1.1 The financial Variables
The most important ingredient in the firm’s planning process is the forecast of sales. It is the sales forecast that forms the basis for the forecast of other variables. The projection of sales in the coming years depends on:
- The past trend in sales that is expected to carry ...
Get Fundamentals of Financial Management, Third Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
