From the course: Business Financials Explained

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Bottom-up financial projections explained

Bottom-up financial projections explained

From the course: Business Financials Explained

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Bottom-up financial projections explained

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- So the next type of forecasting model is bottom up. Bottom up forecasting basically means that you're creating a justified model for forecasting and what this means is that you're backed by real data, that your assumptions actually can be justified, not just made up, right? So this is very important. But I believe this is the best way to do your financials if you can do it. You don't have to do it this way but I know that when I read financials and they're actually justified, I actually believe in them more as an investor or just as a business owner as well. So one of the things we're saying with this justified or bottom up approach to the business model is that everything is justified, right? So we're saying that each marketing and sales activity that you do is tied to a certain return that you're going to get and that you can specify and justify that return that's going to lead to the number of sales. So essentially…

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