Financial Statement Forecasting - Essay Example

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Financial Statement Forecasting

There is no denying the fact that;" investors and share holders around the world base their decisions on financial and economic forecasts (Olley, 2006, 1)." Thus a professional, pragmatic and propitious financial statement forecast will fortify its plans of rapid future growth by exploiting novel business opportunities, undergoing product diversification and resorting to aggressive acquisition.
The success of a company depends to a great extent on the reliability of its financial statement forecasting. To ensure this, it is a must that," the assumptions made in the previous Corporation Budgeting cycle, but not limited to, estimated sales volume, capital requirements, staffing resource requirements, customer demands and vendor contracts" are all meticulously verified and updated to reveal all the possible changes and the most recent data available (Harvard, 2008). All the possible changes projected or encumbered should be balanced by an appropriate action by the management. Microsoft Excel is the most common tool used during forecasting. Financial forecast has to be customized to suit the external and internal realities of a business and has to be flexible to accommodate future changes. ...Show more

Summary

Forecasting commands a paramount place in the scheme of things, so far as the future of a growing company like Strident Marks is concerned. Considering the fact that the company under consideration intends to pursue new business opportunities, an accurate forecasting will certainly enable it to tentatively predict the future possibilities in the light of its past history…
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