What are the Key Components of Financial Forecasting?
The key components of financial forecasting include:
Revenue Projections: Estimating future sales based on historical data, market trends, and other factors. Expense Projections: Predicting future costs, including fixed and variable expenses, to determine net profitability. Cash Flow Forecasts: Assessing the inflow and outflow of cash to ensure the business can meet its financial obligations. Balance Sheet Forecasts: Projecting future assets, liabilities, and equity to understand the company's financial position. Scenario Analysis: Evaluating different financial outcomes based on various assumptions and conditions.