Question

In: Finance

Identify techniques for forecasting financial statements as discussed in the text, and explain when they should...

Identify techniques for forecasting financial statements as discussed in the text, and explain when they should be used.

Solutions

Expert Solution

In general there are 2 type of tools used to forcast financials :

1. Qualitative

2. Quantitative

Example of Qualitative tools are:

1. Expert openions: In this method, opinions and views from expert are taken and used to make the assumptions and forcasts

2. Delphi Technique: In this method, a series of questionnaires are prepared and a group of experts are asked to answer that. Once we get the result of first questionnaire, a second questionnaire is prepared based on the results of the first. This is again given to the experts, who are then asked to reevaluate their responses to the first questionnaire. This process continues until the researchers have a narrow shortlist of opinions.

3. Consumer surveys

Example of Quantitative tools are:

1. Proforma financial statements: This technique use historical values from last 2-3 years and forcast based on that

2. Time series forcasting: In this trend is studied over a period of time

3. Cause effect method


Related Solutions

8. Identify other techniques for forecasting financial statements discussed in the text and explain when they...
8. Identify other techniques for forecasting financial statements discussed in the text and explain when they should be used?
Identify where judgments in the financial statements should be disclosed.
Identify where judgments in the financial statements should be disclosed.
2. Identify the tools and techniques available to managers in the area of forecasting and planning....
2. Identify the tools and techniques available to managers in the area of forecasting and planning. Discuss how you will use these tools to forecast sales and prepare a financial plan for your company?
Identify the tools and techniques available to managers in the area of forecasting and planning. Discuss...
Identify the tools and techniques available to managers in the area of forecasting and planning. Discuss how you will use these tools to forecast sales and prepare a financial plan for your company?
When forecasting financial statements, the percentage of sales method of tying forecast variables to sales may...
When forecasting financial statements, the percentage of sales method of tying forecast variables to sales may not be appropriate when: a. The asset or liability does indeed vary as a constant percentage of sales b. There are economies of scale tied to certain assets such as inventory, where higher levels of sales may be supported with little change in the level of assets c. Property, plant, and equipment expenditures to support growth will be “lumpy” over the planning period d....
What accounting statements/variables should we pay attention to when forecasting equity/firm values? Why?
What accounting statements/variables should we pay attention to when forecasting equity/firm values? Why?
This chapter discussed techniques for conversion investigations that involve searching public records to identify changes in...
This chapter discussed techniques for conversion investigations that involve searching public records to identify changes in lifestyle and the net worth of alleged fraud perpetrators. You recently became a certified fraud examiner (CFE) and have joined a local fraud examination firm. Your manager explains how he prefers to work with private sources of information and not involve local law enforcement agencies in the conversion investigation stage of his cases. You disagree and feel that local law enforcement can be an...
In addition to cryptographic techniques, identify and explain the suite of techniques that are increasingly used...
In addition to cryptographic techniques, identify and explain the suite of techniques that are increasingly used to provide authentication to hospital information systems.
Payback period is one of the techniques discussed for assessing which projects a firm should invest...
Payback period is one of the techniques discussed for assessing which projects a firm should invest in. In finance we generally frown upon it, believing there are a number of better approaches to choose from. Despite this fact, businesses (especially historically) often use payback period. What are some of the drawbacks to this technique? Illustrate with an example of how these drawbacks could lead one to a poor decision if payback period is used.
List and briefly explain four forecasting techniques that can be used to analyse data.
List and briefly explain four forecasting techniques that can be used to analyse data.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT