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Projecting Financial Forecast

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Explain how to perform a projected financial analysis. Identify at least one problem that may result from an incorrect projection.

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A projected financial analysis implies a forecast of future operational performance. In this case rather than an actual analysis, the issue is to forecast the items which will coincide with a forecast of Sales, which will either show an increase or decrease in Sales. The normal and most widely used method for accomplishing this task is the % of Sales method.

In essence, the actual Sales forecast represents ...

Solution Summary

A discussion on how best to forecast future financial performance, and the meaning of the final results which are obtained.