Question

In: Accounting

Forecasting Preliminaries. Begin with the adjusted set of financial statements that reflect the company’s net operating...

Forecasting Preliminaries. Begin with the adjusted set of financial statements that reflect the company’s net operating assets and its operating income that we expect to persist into the future. This requires that we exclude one-time items and adjust other items to reflect anticipated levels of ongoing activities.

What is forecasting preliminaries? How Can I do it for Amazon and Walmart? Please help me.

Solutions

Expert Solution

Forecasting Preliminaries means identifying the specific factors and establishing strategies that will affect the profitability of the business. Changes in major components such as Sales, cost of goods sold, operating expenses need to be considered. Most of the businesses begins preliminary forecast by estimating sales, because sales growth has the major contribution in the profit components.

Forecasting Sales

To prepare a Preliminary Forecast of Amazon and Walmart , you can gather information of Sales Forecast which may include components such as Sales, Cost of Goods Sold, Gross Margin, Total operating expenses, operating income.

This would help in getting the following information, such as:

  • Identifying opportunities
  • Looking into details of competitors

Forecasting Cost of Goods Sold and Operating Expenses

After Sales, the second important forecasting is cost of goods sold and operating expenses.This information will show the cost incurred by any business for producing goods or services.

**You can easily prepare Forecasting preliminaries of Amazon and Walmart by getting information of sales and other related componenets forecast specified above.


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