Now that we have defined the gross margin…levels we will be using for our margin projection,…we need to combine it with our product revenue…performance projected in the previous chapter.…To do so, there is nothing simpler.…We just need to multiply our product revenue projection…with our product margin percentage projection.…For example, if we have planned to generate 10,000 dollars…of revenue with high-end pens and that we have a…forecasted margin of 30 percent for that product…then our gross margin forecast for next year…on high-end pens is going to be 30 percent…times 10,000 dollars which is equal to 3,000 dollars.…
You then just need to apply those percentages to…your product forecasts for all of your product.…
Author
Rudolph Rosenberg
Released
9/9/2014- Distinguish between forecasting and planning.
- Recall the pros and cons of bottom-up projection.
- Explain how a finance manager can utilize a sales pipeline in business projections.
- Describe how a company can forecast its gross margin by product.
- Identify the pros and cons of using top-down projection.
- Recognize how business plans utilize forecasts.
- Summarize how to develop a set of worst-case scenarios.
Skill Level Intermediate
Duration
Views
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Introduction
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Welcome42s
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1. Financial Projection Basics
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Financial projections1m 34s
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2. Estimating Volumes, Price, and Revenue
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Revenue projection basics1m 46s
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Preparing past P&Ls3m 40s
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Market-driven forecasting2m 46s
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3. Estimating Cost of Production and Margin
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4. Estimating Operating Expenses
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Projecting fixed OPEX1m 55s
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Projecting variable OPEX1m 41s
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5. The Top-Down Approach
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The exit methodology2m 15s
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6. Setting Up Targets
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Moving from forecast to plan2m 10s
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Conclusion
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Next steps1m 10s
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Video: Combining product performance with product margins