Discussion week 8

Discussion week 8 - income, information about new product...

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Forecasting financial performance is a very important process, especially because it has an effect on many business decisions like investing and effective management of a company . The authors also state that forecasting revenues is not only the first step we should take when effectively applying the forecasting process, it is also the most “difficult and crucial step in the forecasting process” as most of the forecast statement is based on the assumed relation with the forecasted revenues. For this process we can use external (public) information and internal information if available. Among the internal information we could use as an insider on a specific company we could find data regarding the competitive landscape, consumer trends, tendencies and disposable
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Unformatted text preview: income, information about new product introduction as well as production and marketing plans. In case we were not part of this specific company then we would have to rely on a different set of data. We could use information acquired from public statements made by the company, information disclosed on the MD&A of the 10-k and information on the growth of individual product lines from segment disclosures. In some cases we could also count with guidance provided by the company itself as it is often in the company’s best interest to have outsiders producing forecasts with the highest possible level of accuracy (Easton et al. (2010) References Easton, P. D., Halsey, R. F., McAnally, M. L., Hartgraves, A., & Morse, W. J. (2010). Financial & Managerial Accounting for MBAs (2nd ed.). Canada: Cambridge Business Publishers....
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This note was uploaded on 04/06/2012 for the course FINANCE 410 taught by Professor N/a during the Spring '09 term at AIU Online.

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