From the course: Financial Analysis: Making Business Projections

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Adding back exceptional elements using pipeline information

Adding back exceptional elements using pipeline information - Microsoft Excel Tutorial

From the course: Financial Analysis: Making Business Projections

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Adding back exceptional elements using pipeline information

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At the beginning of this chapter we split our past PNLs into a day-to-day PNL and an exceptional elements PNL, but our forecast cannot simply exclude exceptional elements just because they are hard to predict. We took a stab at the day-to-day forecast. Now let's see how we can reincorporate the exceptional elements. Because those elements are highly unpredictable, the only thing we can really do is to take into consideration anything that we know has some level of likelihood of happening within the year. Many companies maintain a document that lists all the opportunities that the sales staff is working on. This is called a sales pipeline. Often this is nothing more than the list of rows in an Excel spreadsheet with a sales opportunity on each of them. Pipeline management is a much larger topic so for the rest of this video, we'll just be focusing on using the pipeline as a resource. Those sales opportunities could be big or small and some of them might be over the threshold you have…

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