What Are the Common Techniques Used in Financial Forecasting?
Several techniques are commonly used in financial forecasting:
Qualitative Methods: These include expert judgment and market research, often used when historical data is limited. Quantitative Methods: These include statistical models and historical data analysis, suitable for data-rich environments. Scenario Analysis: This involves creating different financial projections based on various scenarios to anticipate potential outcomes. Rolling Forecasts: These are continuously updated forecasts that provide a more dynamic and flexible planning tool.