From the course: Financial Analysis: Making Business Projections
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The revenue trajectory method - Microsoft Excel Tutorial
From the course: Financial Analysis: Making Business Projections
The revenue trajectory method
- In this first methodology we will be projecting revenue based on the month over month or quarter over quarter trajectory the company is currently on. This methodology is actually the combination of two subprocesses. The first one is that a company is subject to seasonality within the year. It can be that the seasonality is dictated by its customers who buy more before Christmas and result in an increase in revenue in November and December. By its suppliers, if for example the goods come from a distant country and shipments arrive only every few months in such case the sales and revenue performance would be somewhat linked to those arrivals of inventory. By its internal processes such as, for example, quarterly sales targets which result in sales reps putting an extra effort at the end of each quarter to meet or beat their target and therefore results in an increase in revenue every three months. The second one is that wherever you are in your current performance is a good indication…
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