Hey everyone!
Can someone please explain what exactly a financial forecast is and why a business would it.
Thanks
Heya!
A financial forecast is the business’ predictions about the future which specifically details costs and revenues for each strategy.
Developing a financial forecast requires:
1. Cost estimate – based on market research, product development, promotion
2. Revenue estimate – based on how much consumers are expected to buy, for what price and what sales staff predict they will sell
By measuring sales potential and revenue forecasts for each strategy and comparing these with anticipated expenditure, the business can effectively allocate marketing resources. Analysing projected costs and revenue allows the business to forecast future profit levels as well as the future success of marketing strategies.
Hope this helps