Forecasting the future
Abstract: Forecasting can help borrowers anticipate future financing needs and prove that they’ll be able to repay loans. But how do lenders know whether a forecast is achievable — or merely wishful thinking? This article discusses how forecasts are more flexible and timely than in the past. They go beyond presenting historical financial data in order to help management evaluate the marketplace for emerging external threats and opportunities. Rolling 12-month forecasts, for example, are adaptable and look beyond year end. A sidebar notes the difference between a forecast and a projection.