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Importance of assumptions in financial planning

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Why is it important that physical assumptions precede financial results in the planning process? For example, what's wrong with assuming you want a business that sells $ 50 million a year earning a profit of $ 5 million, and then building a revenue and cost plan to fit those goals?

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The solution discusses the importance of assumptions in the financial planning process.

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Valid assumptions are important to formulate realistic financial goals ...

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Sandeep Bardia, MBA
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  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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