In this video, the instructor dives into examples of business questions that use forecasting.
- [Narrator] What is financial forecasting?…Financial forecasting broadly defined…can mean predicting any outcome of interest in business.…And in our case,…we're going to be looking at doing that using data.…You're probably most familiar…with the concept of financial forecasting…as it relates to profits at a firm or sales at a firm,…but the reality is that businesses that embrace forecasting…can use a variety of data to predict many useful…but unconventional metrics using forecasting.…
There are a few things that are holding back business though…when it comes to this type of forecasting.…In particular, businesses are held back from using data…by two key factors, a lack of data…or missing skills among their personnel.…When we're referring to a lack of data,…what we typically mean is that the company for example…might have a variable of interest that they're looking at,…say the effect of increasing marketing on sales,…but they lack the data to figure out…how increasing marketing spend will drive sales.…
Similarly, perhaps if they have the data,…
Join Professor Michael McDonald and discover how to use predictive analytics to forecast key performance indicators of interest, such as quarterly sales, projected cash flow, or even optimized product pricing. All you need is Microsoft Excel. Michael uses the built-in formulas, functions, and calculations to perform regression analysis, calculate confidence intervals, and stress test your results. You'll walk away from the course able to immediately begin creating forecasts for your own business needs.
- List the two methods of making decisions.
- Identify the most common method of conventional financial forecasting.
- Describe common challenges that come when trying to merge data.
- Assess the types of questions that business intelligence is best suited to answer.
- Distinguish the statistic that is most useful for estimating the impact of an X variable on a Y variable.