Financial Forecasting & Planning

Financial forecasts are, quite simply, your forecast of how your business will perform financially over, say, the year ahead. Preparing forecasts will help you to assess your likely sales income, costs, external financing needs and profitability. Financial forecasts are essential if you need to raise money from a third party, such as a bank. But they also provide you with the means to monitor performance on, say, a monthly basis and thereby exercise effective financial control - arguably the second most important management function in running a business.

Objectives

The aim of this section is to help you to prepare financial forecasts. It will enable you to:

  • Understand costing and pricing;
  • Use break-even analysis as a way of setting sales targets;
  • Understand financial forecasting;
  • Assess working capital requirements.

Assignment

The purpose of these assignments is to ensure that you are able to prepare the necessary financial forecasts for your business. Satisfactory completion of the set of assignments will demonstrate that you know and understand how to:

  • Identify and calculate the financial outlines it will be necessary to prepare.
    Get quality help now
    Marrie pro writer
    Marrie pro writer
    checked Verified writer

    Proficient in: Economy

    star star star star 5 (204)

    “ She followed all my directions. It was really easy to contact her and respond very fast as well. ”

    avatar avatar avatar
    +84 relevant experts are online
    Hire writer

  • Calculate your own personal survival budget.
  • Determine the funding/materials requirements of starting in business.
  • Consider how you will take and keep effective financial control of the business.
  • Consider and plan to deal with alternative scenarios.

Personal budget

How much money do you need for yourself. Think about food, clothes, holidays, personal travel, etc. Draw up a personal budget. Don’t skimp. You may be in business to have fun – but you need to make money as well.

Get to Know The Price Estimate For Your Paper
Topic
Number of pages
Email Invalid email

By clicking “Check Writers’ Offers”, you agree to our terms of service and privacy policy. We’ll occasionally send you promo and account related email

"You must agree to out terms of services and privacy policy"
Write my paper

You won’t be charged yet!

Use this budget in calculating your costs and prices. Of course you may not have enough sales at the start to be able to take that amount of money, so you should also calculate the minimum requirement that you must take from the business.

Costing and pricing

Calculate all your costs and determine a suitable price for your product or service. Think about your raw material requirements as part of your direct costs; think about your likely overhead costs.

Break-even

Now that you have calculated all your costs and set a price, you should be in a position to prepare a break-even chart. Is your forecast of sales above or below break-even? Do you have a reasonable margin of safety? How much profit will you make if you achieve your sales forecast?

Forecasting profit and loss

You should have all the figures that you need to prepare a forecast of profit and loss. What is your anticipated gross profit margin? What is your operating profit? How much money will be retained in the business?

Cash flow forecasting

You should have all the figures that you need to prepare a cash flow forecast. Remember to think about everything shown on the profit and loss account, expenditure items not shown on the profit and loss and, in particular, to think about timing or receipts and payments. You will also need to think carefully about your stock holding requirements and your capital expenditure. The first time you prepare the cash flow, ignore any investment or borrowing other than that required for capital equipment. The worst cumulative deficit will indicate the minimum level of working capital required.

Forecasting your balance sheet

Once you have completed the profit and loss and cash flow forecasts, you should be able to prepare a balance sheet forecast. What level of working capital requirement is suggested by the balance sheet?

Sensitivity analysis

Have another look at your profit and loss and cash flow forecasts. What happens if sales are 15% less than you have forecast? Do you still make a profit? What happens if raw material prices go up by 25%? What does this do to your profitability? Can you pass on such increases to your customers or will they switch suppliers?

Effective financial control

You should now be in a position to exercise control over your business. Will you use a simple manual book-keeping system or a computerised one? As a brief reminder, write down the key reasons for keeping effective financial control. What are the critical numbers at which to look to ensure you retain effective financial control?

Break Even Analysis

Break-even analysis identifies the point at which your business starts to make a profit. You can work out the break-even point using any timescale, e.g. weekly, monthly, yearly, etc. To calculate the break-even point you need to know the following: •The total fixed costs of your business - these include rent and rates, your drawings, loan repayments, etc; •The total variable costs for producing your product - these include labour, materials and packaging; and •The selling price of your product.

Once you have these figures, you can work out your break-even point using four simple calculations and plotting the findings on a graph.

Example:

Ron from Widgets 'R' Us want to work out how many widgets he needs to sell in order to break-even every month. He works his fixed costs out as follows:

  • Rent - £167 per month
  • Salary - £834 per month
  • Rates - £70 per month
  • Loan repayment - £100 per month
  • Total - £1,171

(£1 = Rs.84) (Note: It is better to round figures up rather than down, as this will increase your safety margin.)

This figure can be plotted as follows:

Ron then works out his variable costs for the production of each widget:

  • Materials - £9.00
  • Packaging - £1.00
  • Labour - £11.00
  • Total cost - £21.00 per widget

(£1 = Rs.84)

He selects a value on the 'number of widgets' axis (in this case, 250) and does the following calculation: •250 widgets x £21.00 per widget = £5,250 Ron plots this figure on the graph and draws a straight line from it to zero.

The next step is for Ron to work out his total costs. To do this, he adds his fixed costs to his variable costs: £1,171 + £5,250 = £6,421 (£1 = Rs.84) He plots this figure on the graph and draws a straight line from it to £1,171 on the 'Pounds' axis.

Ron now needs to work out his revenue line. To do this, he simply multiplies his products' selling price by the example number of widgets he chose earlier (250): £32.50 x 250 = £8,125 (£1 = Rs.84)

He then plots this figure on the graph and draws a straight line from it to zero.

Ron can now find his break-even point simply by locating the exact point where the revenue line disects the total costs line.

In this case, Ron must sell 100 widgets each month if his business is to break-even. If he sells more than 100, he makes a profit; if he sells less he makes a loss.

Costing And Pricing

Costs

Although accountants define costs in several different ways, there are, effectively, just two types of cost. The first cost is that which is directly attributable to the product or service. Direct costs include, for example, raw materials and sub-contract work. If you make desks, for example, the cost of wood will be a direct cost. Within reason, the cost will be the same for each desk, no matter how many desks you make. When you make a sale the income first has to cover the direct costs relating to that sale. Whatever is left is called gross profit or contribution.

All other costs are overheads. These include, for example, staff salaries, marketing, rent, rates and insurance. They also include depreciation; that is, an allowance for wear and tear on capital equipment. Overheads are often called fixed costs because, generally, they are fixed for the business. Interest is often regarded as a deduction from net profit rather than an overhead cost. You need to include it as an overhead in your costing calculations, even though it varies with the size of your overdraft or loan. If you are self-employed, you will take drawings from the business. Whilst, strictly speaking, drawings are an advance against profit, include them (and an allowance for income tax) as an overhead when calculating total costs.

The contribution is so-called because it contributes towards covering the overhead costs. Each sale generates a contribution. When enough contributions have been made, and all the overhead costs are covered, they start to contribute to net profit.

Price

The price at which you sell your product or service clearly needs to exceed the total costs of providing it. But the price should also reflect what the market can stand. If you are selling a differentiated product or have adopted a strategy of market focus then you may also be able to charge a premium price. If you are pursuing a cost leadership strategy you will need to be ruthless in keeping your costs down and under control.

In calculating your price you will need to follow a number of steps: •Estimate your likely sales for a period, say, one year; •Calculate the total direct costs and divide by the sales volume to give direct costs per unit (say per product or per hour of service); •Calculate your total overhead costs and divide by the sales volume to give overhead costs per unit; •Add direct costs per unit and overhead costs per unit to give total cost per unit; and, •Add a further profit margin (to allow for reinvestment, etc). If necessary, add VAT as well. You now have a first stab price. How does that compare with your competitors? Will customers buy at that price? Do you need to reduce costs? Can you achieve a higher profit margin?

What happens if you fail to achieve sales at the determined price? Remember that the overhead costs are fixed, so if sales fall the overheads will be spread over fewer items and the unit cost effectively increases. The converse is also true. Increasing the volume of sales means that the overheads are spread over more units, so the unit cost falls. This means that you can, if you choose, reduce the price. And reducing the price might increase your level of sales. It’s a fine balancing act.

Depreciation

Depreciation is an allowance for wear and tear on the equipment used in your business. As time passes, your equipment will usually lose value, and this can be considered a cost to your business. You need to think about how long you expect your assets to last. For example, if you purchase a computer system, you may forecast that in 5 years it will be obsolete. That means the depreciation rate is 20% per year. If you determine it to be 2 years, then it will be 50% per year. This does not have any effect on cash flow, just on how profits are calculated. Deprecation is an accounting cost that must be included to give a Profit ; Loss account more relevance. Finance Action Planner (FAP)

The Finance Action Planner (FAP) is a learning tool that will help you to:

  • Develop your all-round financial skills
  • Learn more about a range of financial issues
  • Identify suitable sources of finance
  • Create a set of financial forecasts
  • Test out different financial scenarios

Financial forecasts

Once you have an idea of your likely costs and an idea of how much you need to sell to make a profit you are in a position to prepare financial forecasts. There are three basic financial statements (the profit and loss account (P;L); the cash flow statement; and the balance sheet) that describe the activities and financial state of any business. These can be prepared on a historical basis - to show how a business performed during a defined period - or as forecasts - as estimates of how the business will perform in the future. 3 steps to forecasting

  1. Businesses often start by forecasting their cash flow and then aim to derive other forecasts from it. It makes more sense, however, to start by forecasting the income and expenditure of the business, which will indicate whether you will make a profit, then worry about when money will be received or paid out - to discover if you will have enough cash when it is needed. Income and expenditure is summarised in a profit and loss account.
  2. You will also need to look at your likely sales for, say, the year ahead. This needs to relate back to your market research and, if you are already in business, to previous performance. The direct costs can then be estimated (usually as a percentage of sales) to give gross profit.
  3. The next step is to estimate the likely overheads. Deducting these gives an operating profit forecast. If the net profit is too low you will either need to assess whether you can achieve higher sales or whether you can reduce the overheads. When preparing your forecasts, remember to allow for increased costs, for instance, due to inflation or future pay awards. If you do need a loan, then you will also need to allow an amount for loan interest. If you use equipment, remember to allow for depreciation. Whilst depreciation is not included in the P;L, you may need to allow for the replacement or repairs of machinery, so you may wish to include a contingency.

The P;L forecast will show whether you are likely to achieve your first key financial requirement: making a profit.

Preparing cash flow forecasts

In preparing your forecasts, you will need to think carefully about all your costs, about your price and likely sales at that price and about the timing of both receipts and payments.

As mentioned above, the first forecast that you set out should ideally be a P;L, summarizing income and expenditure for, say, the year ahead. You might do this monthly or annually. The P;L is important for demonstrating profitability; over the very short term, however, the key requirement is to generate cash and know the business’s working capital requirements. This can best be done by preparing cash flow forecast which should set out all the information, month by month, regarding cash inflows and outflows. The cash flow forecast should include:

  • Receipts of cash from customers;
  • Payments for raw materials;
  • Payments for all other expenses;
  • Drawings and wages;
  • Capital expenditure;
  • Capital, loans or grants introduced;
  • Loan repayments;
  • VAT receipts and payments (if VAT registered); and,
  • Tax payments.

All of these items should normally be shown separately and in the month into which the money will be received, or paid by, your business.

For businesses with a modest turnover and that demonstrate profitability in the year, it is normal only to forecast one year ahead, with a monthly cash flow. Larger businesses, especially those seeking equity investments and/or which do not show profitability in the year, may need to prepare forecasts for two or three years. The first year cash flow is usually shown monthly, the second year quarterly and the third year just a single annual figure.

It is often helpful when preparing cash flow forecasts initially to ignore any finance that is available from the bank or other lenders. The cash flow forecast then shows the true position of the business. It can then be used to decide if the budget is viable and can be adjusted to reflect the true position and to assess the total funding requirement.

If you do not have sufficient money of your own, then you will need to seek loan finance or an equity investor. Most small businesses simply look for loan finance. Aim to match the term of the loan to the life of the asset for which it is required. It would be normal to look for a short-term loan, for example, to purchase equipment, or a long-term loan to purchase premises. You will also need to buy stock and pay overheads whilst awaiting payment from your customers. The money required is called working capital and is typically funded by an overdraft. When preparing your cash flow forecast, you may like initially only to include personal investment or loan finance for fixed assets and to ignore funds for working capital. The worst cumulative deficit will then give an indication of your total working capital requirement. Of course, the amount that you need to borrow can be reduced if you have more available to invest yourself.

If you have a term loan, the capital repayments will not figure in your profit and loss account - they are not a business expense - although the interest portion of the repayments will be charged as an expense. However, the repayments do need to be included in your cash flow forecast.

Balance sheet

The money in a business can only come from three sources: capital introduced by the owner(s); loans (whether from the bank or, effectively, from creditors); and, retained earnings; that is, profit which has been generated by, and retained within, the business. That money is used to finance the fixed and current assets of the business. Current liabilities include:

  • Creditors
  • Overdrafts
  • Loans due within one year
  • Money owed under hire purchase agreements
  • Any amounts owed in VAT or tax, etc.

In larger businesses, loans falling due in more than one year are usually shown separately. You will, however, have a better idea of your business’s performance if you show all loans as current liabilities.

Current assets less current liabilities show your working capital requirement. Since the balance sheet is merely a snapshot, however, it may be better to deduce your working capital requirement from the cash flow forecast.

The net assets are always equal to the capital introduced plus reserves; that is, the net finance, sometimes known as net worth or the equity of the business.

The net finance, together with any long-term loans, is called the capital employed. All borrowing should be included when calculating capital employed.

Pricing Strategies

The greatest danger when setting a price for the first time is to pitch it too low. Raising a price is always more difficult than lowering one, yet there are great temptations to undercut the competition. It is clearly important to compare your prices to your competitors’, but it is essential that your price covers all your costs. There are a number of possible pricing strategies from which you might choose. These include:

  1. Cost based pricing - total costs are calculated and a mark up is added to give the required profit.
  2. Skimming - you charge a relatively high price to recover set up costs quickly if the product is good or new. As more competitors enter the market, you lower the price.
  3. Individual - you negotiate prices individually with customers based on how much they are prepared to buy.
  4. Loss leaders - if you wish to sell to a particular market then you might sell one product or service cheaper to gain market entry. You balance this by selling other products or services at a higher price. This can be risky as the danger is that everything becomes a loss leader.
  5. Expected price - what does the customer expect to pay? If you are selling a quality product, do not under price. Often the customer expects to pay a lot as the product or service has a certain ‘snob’ value and this may be diminished if you under price.
  6. Differential pricing - you charge different segments of your market different prices for the same service. For example, offering discounts to certain people like pensioners or the unemployed, or charging lower rates for quiet periods. If, after working out your costs, the price you charge is much greater than your competitors’ then you will have to look at ways of reducing costs.

Sensitivity analysis

It is important to know how sensitive your forecast is to changes. Sensitivity analysis looks at ‘what if?’ scenarios. What happens to your cash position, for example, if sales fall by 10%? What happens if your main supplier increases raw material prices by 12%? Financial institutions when considering propositions for a loan particularly use sensitivity analysis. If your business is particularly susceptible to small changes, then you probably do not have a sufficiently large profit margin. You will thus be less likely to receive the loan required. You may find it difficult to cut costs. You may not be able simply to increase prices to improve your margins - that might deter customers. Are there other ways in which you can push up the margins, e.g. by increasing output?

Having undertaken your sensitivity analysis, you may need to review elements of your forecast. Sensitivity analysis can help in making decisions. You may want to consider, for example, the effect of increased raw material, labour or overhead costs; of reducing prices, with constant volumes, to counteract competitors; or reducing volumes, with constant prices, due to over optimistic forecasts. Furthermore, if you are about to spend a large sum of money on equipment, you may want to look ahead several years, if at all possible.

Including a sensitivity analysis in your business plan will demonstrate that you have thought about some of the potential risks - and that is half way to avoiding them.

VAT (Value Added Tax)

VAT is tax paid on the value added at each stage of delivery of a product or service. It is a method whereby businesses act as tax collectors for the Government. If you are registered for VAT, by submitting a VAT return you can claim back what you have paid in VAT, and hand over what you have collected. Not all goods are taxable - for example, insurance, some education and training, and postal services are exempt. If items are VAT-able, then, ignoring VAT on fuel, there are two rates - standard (currently 17.5%), and zero-rated. Zero rated items are different from exempt items. It is only necessary to register if your output is taxable. If you do register, you will be able to recover VAT on your purchases including materials, capital equipment and overheads. You will, however, have to charge VAT on your sales.

The difference between what you collect and what you pay out in VAT is passed on in due course to Customs ; Excise. There is more paperwork involved if you are VAT registered - you need tax invoices showing your VAT number, an analyzed VAT account, and VAT return forms. It may, however, be advantageous to register voluntarily if your sales are below the turnover limit, because VAT paid on purchases can be reclaimed. You may also reclaim VAT on capital equipment, raw materials and stocks bought before registration, provided the business still owns them. If you are selling to VAT registered businesses, it is likely to be more attractive for you to register. If you are selling to the general public, it probably will not be. This is, however, an area where you should seek professional advice.

Brian's Book-keeping Business Brian runs a book-keeping service for several small businesses. His overheads are as follows: Costs£ Per year (£1 = Rs.84) Office costs5,000 Advertising 1,100 Insurance550 Telephone650 Vehicle running costs900 Other3,000 Brian works 40 hours per week. He spends 8 hours per week on administration, marketing, etc. He works 45 weeks each year allowing for holidays and illness. Brian draws £200 out of the business each week.

Brian has been asked to undertake a specific task and estimates he will need to spend 12 hours on it. What is the cost of providing the service? How much should he charge?

Solution: What is the cost of providing the service?

  1. Total hours worked per annum = 32 hours per week x 45 = 1,440 hours 2. Total drawings = 200 x 52 = £10,400
  2. Total fixed costs = £11,200
  3. Total costs = £21,600
  4. Costs per hour = 21,600/1,440 = £15
  5. For a job lasting 12 hours, the cost is £ 180

(£1 = Rs.84)

How much should he charge?

Brian has decided that he should also add a further 20% profit margin in case his costs go up and to make a little extra for reinvestment. 180 + 20% = 216

He is also registered for VAT and needs, therefore, to add VAT at the standard rate (17.5%) 216 + 17.5% = £253.80

So the price he charges to his customer is £ 253.80

Useful tips:

  1. Some readers of your business plan will regard the financial forecasts as the most important component. It is where you summarise the expected income, dependent on your market research, and where you set out your expected costs.
  2. The forecasts need to demonstrate that the business is viable and that there is a sufficient margin of comfort to allow for fall in demand or increase in costs.
  3. Take care to prepare your financial forecasts as accurately as you can. Then compare your actual results with your forecasts and, if necessary, take corrective action at an early stage to keep yourself on course.

Business Forecasting Assignment Operations

Business forecasting is the process of studying historical performance for the purpose of using the knowledge gained to project future business conditions so that decisions can be made today that will aid in the achievement of established goals. Forecasting plays a crucial role in today's uncertain global marketplace. Forecasting is traditionally either qualitative or quantitative, with each offering specific advantages and disadvantages.

Qualitative and Quantitative Forecasting TechniquesForecasting can be classified into qualitative and quantitative. Qualitative techniques are subjective or judgmental and are based on estimates and opinions. The Delphi technique, a common form of qualitative forecasting, allows experts to create an effective forecast under conditions of extreme uncertainty. Time's series forecasting, a quantitative technique, uses a statistical analysis of past sales in order to effectively predict future outcomes, but can be limited under conditions of uncertainty (Chase, 2003, p.364).

Business forecasting can be used in a wide variety of contexts, and by a wide variety of businesses. For example, effective forecasting can determine sales based on attendance at a trade show, or the customer demand for products and services (Business and Economic Forecasting, p.1). One of the most important assumptions of business forecasters is that the past acts as an important guide for the future. It is important to note that forecasters must consider a number of new information, including rapidly changing economic conditions and globalization, when creating business forecasts based on past sales. Globalization and economic slowdown has made businesses subject to a great deal of uncertainty. In this time of rapid change, economies worldwide change rapidly, new markets open up and old ones change, and demand for products is often uncertain. As such, businesses must be flexible and adaptable in the types of methods that they use to forecast future sales (Chase, 2003, p.472).

In an ever-changing global marketplace, organizations are constantly coming up against unusual and novel situations. It is in these situations that modern methods of business forecasting can be especially useful. Modern forecasting methods are usually grouped into two main categories: qualitative methods, and quantitative methods. Qualitative analysis includes the intuitive and knowledge-based approach as discussed earlier. The decision maker reviews all of the information available, and then makes an estimated forecast. Quantitative techniques are used mostly when qualitative information is not available. In contrast, qualitative techniques are based on an analysis of data (Namvar, 2000, p.8).

Delphi Forecasting MethodQualitative forecasting techniques are: executive committee, the Delphi method, and surveys of the sales force, surveys of customers, historical analogy, and market research. The objective of most Delphi applications is the reliable and creative exploration of ideas or the production of suitable information for decision-making. The Delphi Method is based on a structured process for collecting and distilling knowledge from a group of experts by means of a series of questionnaires interspersed with controlled opinion feedback (Chase, 2003, P471).

The Delphi method is a variation of the executive committee approach. But the interaction is indirect, iterative and structured. The basic premise of Delphi method is to identify a group of experts and each of them are given a set of questions or issues, and asked to respond. After a given amount of time, the responses are sent to a coordinator or monitoring group that does not participate in the earlier stages of the Delphi processes. This group then feeds back the responses to other members of the group, while never giving away the identity of the response. The experts are then asked to respond again, after reviewing the responses of other respondents. This process may continue until a consensus is reached among the group. The group may be united to form a final consensus (Namvar, 2000, p.8).

Time Series Forecasting MethodTime series techniques are the most popular quantitative method. These techniques use statistical methods for projecting from historical data. Quantitative techniques are preferred when appropriate data are available. The main assumption is that the historical pattern will continue into the future. The two main types of time series forecasting are average smoothing and exponential smoothing. The moving average is simply a series of arithmetic averages. Predicting sales for next year is simple. The actual sales for a certain number of years is added, and then divided by the number of years used to get the moving average. A weighted moving average is obtained by assigning a specific weight to previous years. The sum of all weights must equal one. Recent years are given a higher weight (Namvar, 2000, p.13).

Exponential smoothing is simply a subtype of the weighted moving average. A new forecast is a weighted sum of actual variables (usually sales) in the current year and the weighted forecast of the variable for that period. It has the advantage of being relatively easy to compute. In contrast the moving average method is quick, cheap, and easy to use, but does not easily take into account variations based on seasonal effects and cycles (Namvar, 2000, p.14).

Both the Delphi technique and Time series forecasting are valuable forecasting tools in the right circumstance. The Delphi technique is useful for short-term forecasts. This ability is contingent upon the familiarity of experts with specific issues (Namvar, 2000, p.8). One of the major problems with the Delphi technique, as with all other qualitative techniques, is identifying good employees to form expert opinions and judgments, and then getting these experts to agree on a forecast (Namvar, 2000, p.9).

Given the limitations of qualitative techniques, quantitative forecasting is usually preferred where there is enough past data (Namvar, 2000, p.12). In conditions of uncertainty, the Delphi technique offers a great deal flexibility. Using the Delphi technique, experts in a field can often come to a creative and insightful consensus. In contrast, time series forecasting may be less useful under conditions of extreme uncertainty because of its qualitative nature. When new conditions arise, it may be difficult to predict future sales based on past sales when conditions were more certain. Therefore, the Delphi technique is often a more valuable tool for business forecasting during conditions of uncertainty.

Firstlogic Inc., The Company manufactures information quality and postal automation software that helps companies ensure the data they are storing
and adding to their corporate databases is clean, accurate and reliable. More than 6,000 customers around the world use Firstlogic products. (www.firstlogic.com). The recent global economic slowdown and increased uncertainty in many facets of business, have caused organizations to rethink their priorities and strategies. Like any other companies, My company was forced to look well ahead in order to plan their investments, launch new products and services, devise new ways to develop and leverage human capital and so on. All key decisions related to these activities are derived from a sales forecast, which is the most critical and difficult area of the management.

Forecasting can allow businesses to predict sales, and thus determine a wide variety of business expenses. Firstlogic heavily relies on quantitative methods for business forecasting based on several factors like degree of accuracy, investment decisions, time horizon to forecast, capital investment decision, product changes, style, quality, price changes, labor problems, available data and information and position of products in its life cycle to forecast the future sales.

Firstlogic use information on past sales and times to help determine demand for products and services, effectively forecasting the specific products/services that would release to market at a given point in time. Despite the effectiveness of quantitative forecasting tools, the company has had less success with these methods in short term forecasts. Given the high degree of uncertainty in today's marketplace, qualitative forecasting techniques like the Delphi technique may help Firstlogic to better-forecast future sales.

Conclusion

In conclusion, business forecasting methods must be used in order to fit current conditions of uncertainty. Delphi technique and time series forecasting both are valuable forecasting tools when used in the right circumstance. The Delphi technique is useful for short-term forecasts; therefore, it is often a more valuable tool for business forecasting during conditions of uncertainty.

References

Business and Economic Forecasting. Retrieved November 4, 2005, fromhttp://www.sbeusers.csuhayward.edu/~acassuto/econ3551/summary/chapter6.ht

Updated: Sep 29, 2022
Cite this page

Financial Forecasting & Planning. (2016, Mar 23). Retrieved from https://studymoose.com/financial-forecasting-planning-essay

Financial Forecasting & Planning essay
Live chat  with support 24/7

👋 Hi! I’m your smart assistant Amy!

Don’t know where to start? Type your requirements and I’ll connect you to an academic expert within 3 minutes.

get help with your assignment