Definition of Financial Forecasting

While looking for some documents in my (disastrous) home filing system a couple of days ago, I found a 10 year old memo I’d written to one of my officers asking for my definition of a good financial forecast.

“What I want out of you in a financial forecast is a credible projection that reflects current performance of the existing business — adjusted intelligently for future initiatives, market conditions and customer buying patterns not yet baked into the current run rates.  And, after your financial forecast gets turned in and we discuss it, while I certainly understand you not having all the answers off the top of your head — I do expect that when an answer is produced it will incorporate considerable forethought, coherent and documentable analysis, and be an answer that everyone in your business unit management squadron will stay “in formation” around.”

Sounds pretty good to me still. Cheers.  DC

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