Financial Forecast - Budget Forecasting

A financial forecast is an estimate of future financial outcomes for a company or country (for futures and currency markets). Using historical internal accounting and sales data, in addition to external market and economic indicators, a financial forecast is an economist's best guess of what will happen to a company in financial terms over a given time periodâ€"which is usually one year. See Financial modeling.

Arguably, the most difficult aspect of preparing a financial forecast is predicting revenue. Future costs can be estimated by using historical accounting data; variable costs are also a function of sales.

Unlike a financial plan or a budget a financial forecast doesn't have to be used as a planning document. Outside analysts can use a financial forecast to estimate a company's success in the coming year.

Tools

Financial tools can be used by entrepreneurs to help them building their company's forecast (Score, Business Model Forecast, ...).

Budgeting and Forecasting Part 1