What are the factors to be considered financial forecasting?
Answers
Explanation:
There are many factors (economic, social, climate, etc. ) that can affect demand forecasts.
These factors could be circumstantial or a more profound trend change.
Technology directly influences consumer habits in a very important way.
Answer:
Planning for the future is one of the key aspects of organizational management and is critical to the success of all businesses, irrespective of their size. This technique is called forecasting, and it includes estimating important factors, such as sales volumes, expenses, investment and profit, that could influence outcomes for a business.
Financial forecasters employ various methods to arrive at their estimates. There are two types of forecasting – qualitative and quantitative.
Qualitative techniques are generally deployed where historical data is not available. These methods depend on the judgment of experts to generate forecasts.
On the other hand, quantitative forecasting methods are used when historical data across categories and periods is available, and can be analyzed to get estimates.
Some of the widely used financial forecasting methods that your business can use for effective financial planning are explained below.