From the course: Financial Analysis: Making Business Projections

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Revenue projection basics

Revenue projection basics - Microsoft Excel Tutorial

From the course: Financial Analysis: Making Business Projections

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Revenue projection basics

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Out of all the elements that we will be learning to project, revenue is probably the most complex. Not because of the financial methodolody to be used, and not because of the different types of elements that make it up. Revenue is the most complex P&L element to project because it is the one you have the least control over. For gross margin or operating expenses, you have quite a say. But for revenue, the only thing you have control over is the resources you will be putting in place to generate it. Then, it is going to be up to those resources and to your customers to decide how successful you're going to be. Because everything is not up to you when it comes to revenue, we can be tempted to be either too optimistic or not optimistic enough in our financial projections. To circumvent that problem, in this chapter we will be learning how to break down revenue into manageable pieces. We will project those pieces individually and then put them back together in order to get a realistic…

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