What is a financial forecast or projection?
A financial forecast is normally an estimate of future financial outcomes for a company. Using historical accounting information, in addition to external market and economic indicators, a financial forecast is managements’ best guess of what will happen to a company in financial terms over a given time period — which is usually one year. A financial forecast presents the Company’s expected financial position, results of operations, and cash flows for the forecast period based on management’s assumptions, reflecting conditions expected to exist and the course of action management expects to take during the forecast period. A financial projection not only presents the Company’s expected financial position, results of operations, and cash flows for the forecast period based on management’s assumptions, reflecting conditions expected to exist and the course of action management expects to take during the forecast period but applies procedures considered necessary by the accountants in the
Related Questions
- Does the financial forecast contain all of the available information that is pertinent to the decision being evaluated?
- Is it possible to generate full financial results for a sub-set of my model based on the total company projection?
- Regarding the plan and its forecast, does it cover sales or the financial plan, or both?
