See how to go from historical accounting statements to forward-looking financial projections using Excel in this video. The instructor demonstrates CAGRs and other basic forecasting methods in Excel to enable financial forecasting.
- [Narrator] In addition to recording … and synthesizing information, … accountants are sometimes called upon … to make forward-looking forecasts. … The flexibility of Excel makes this easy to do. … I'm in the 04_01_Begin Excel file. … Now what we have here are … the financial statements for the firm. … The income statement, the balance sheet … and our statement of cash flows. … We've also made a series of assumptions about the firm … based on projections and reality. … So we've made assumptions about market share … and revenue growth on a forward-looking basis. … These forward-looking basis assumptions … are often based at least … in part on what's happened historically. … So in this case, we've simply taken a simple rolling … four-year average to come up with what we think … projected market share … and market growth will be going forward. … When it comes to the most important financial forecast … we're going to make though, that's probably going to be … built around revenue growth. …
- List the most common tasks and approaches faced by accountants in their daily lives.
- Determine whether transactions can be exported from Quickbooks to Excel or not.
- Outline the structure that the SUMIF function uses.
- Explain how to measure EBITDA.
- Identify at what level the General Ledger tracks expenses.
- Break down how to construct a business valuation using a cash flow analysis.