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Define forecasting. How can it be used by managers to make business decisions?

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Define forecasting. How can it be used by managers to make business decisions? What contributes to the process your firm uses to produce its forecasts?

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Solution Summary

How can it be used by managers to make business decisions? What contributes to the process your firm uses to produce its forecasts?

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Forecasting means estimating the future values. It is an essential tool in decision making process. The financial forecasts detail the financial aspects of the corporation. The forecasting generally includes a sales forecast, the capital budget, the cash budget, pro forma financial statements, and the external financing plan. Thus forecasting help in planning, preparing budgets, controlling and implementing strategy.

Components of the forecasting process
1. Information capture
We collect information, whether it's from ...

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