Financial- Net Income Statement - P&L Part 4

Question 1

Why Forecasting?

Answer 1

• Planning/allocation of resources
• Capex planning
• Strategic Business Decisions

Question 2

What are the consideration when forecasting?

Answer 2

• Economy at the time
• Exchange Rates
• Exceptional/One-off Costs

Question 3

Examples of Forecasting?

Answer 3

• FP-20
  
  • 12 month rolling forecast
• Capex Plan
• Liquidity Forecast
• Currency Exposure
• Cashflow

Question 4

What can be influenced in the future? Forecasting

Answer 4

• revenue
• short term cost control measures (ie not necessarily just reducing headcount)

Question 5

Focus on operating profit margins: ForeCasting

Answer 5

• product
• service
• reimbursable

Question 6

What are Forecasting Steps?

Answer 6

• Decide on activity level in line with Clients Plan & Market Condition.
• Estimate Revenue
• Prepare full P&L
• Take into account
  
  • Revenue: Past Performance, Seasonal Changes, Market Conditions, Existing/Potential Contracts, Analysis of Competition, Tech development
  • Costs: Recruitment, Facility, Salary Increase, CAPEX for depreciation, M&S, Existing/New Lease contracts