A Business forecast is management's best estimate of what will happen during the forecast period. It is not a budget, which is more in the nature of a target.
Forecasts will be prepared by a business for a variety of reasons. Many companies require a forecast quarterly or half-yearly to determine how much a company might be over or under budget.
A forecast maybe required if there is a major change within a business. This could include introduction of a new product, or a finding that an existing product is hazardous. Or, a forecast might be prepared if a new competitor emerged, or disappeared. Major events completely unrelated to the business, such as the 9/11 terror attacks, may result in a forecast being prepared.
Categories: [Business] [Finance] [Accounting]