Financial Forecasts
Managers and external users of financial information are more concerned with what the future holds for an organization than its past history because what has happened has happened and reporting systems are incapable of changing history. Financial forecasts on the other had can be used for budgeting as well as planning purposes. The forecasts offer expected results based on historic facts. Investors and share holders around the world base their decisions on financial and economic forecasts. Public companies are special under constant pressure to perform according to budgeted expectations and forecasts. Failure to do so results in lower stock prices and financial difficulties. Forecasting comes under the broad subject of predictive accounting. The four main aspects of predictive accounting are:
It improves projecting financial performance by monitoring whether processes are in control. In-control processes are predictable; out-of-control processes are......
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Approximate Word Count: 469
Approximate Pages: 2 (260 words per double-spaced page) |