Question

Listen to the investor call on the Anthony's Orchards website. Write a 1- to 2-page paper analyzing the investor call. State how the business plans to adjust and indicate whether you agree with the business decision. If not, how would you adjust the forecast in the next quarter based on the earnings call (i.e., second quarter numbers would go up instead of third; costs will go up in December, etc.)? Based upon the information, is it important to forecast? How is a forecast different than a budget?

Answer 1

Earnings calls are designed to provide disclosure & financial results for certain reporting period. In addition, earnings call also provides transparency & also help in forecasting & planning.

Investor conference calls help the companies to communicate about important economic, financial, operational data about current & short term operations that may or may not impact the investor’s decisions on company’s stock. The investor’s call of Anthony orchard was moderated by bill owns, communications director & held by Mary Scott, cfo for the fourth quarter September 2011.

The company had a strong quarter on safety.

The business decisions can be agreed as it helps the investor to make decisions about the company whether to invest in the stock of the company.

Forecasting is important because it tells the future of the environment in which the company is going to operate. It helps the management to make correct decisions. A business owner is required to know as how the outlook will be in the future. For example, if a company is engaged in sales, the manager is required to how much he has to produce as excess production can lead to unnecessary inventory.

Differences between budget & forecast:

A budget is defined as a quantitative expectation of what the business wants to achieve. It is a detailed representation of the financial position, future cash flows, future results & the cash flows that the business aims to achieve during a given time period.

Whereas forecast is a simple estimation of future course of event or trend. It is a forward looking attitude of the organization that encompasses projection.

Budget sets targets whereas there are no targets for forecasts; budget is prepared on annual basis whereas forecast is done on regular intervals.

Budget tells what the business wants to achieve whereas forecasts will tell what the business will achieve.

Budgets can have variation to some extent whereas forecasts dosent has any variance.