From the course: Finance and Accounting Tips

Unlock the full course today

Join today to access over 22,600 courses taught by industry experts or purchase this course individually.

Forecasting financial statements

Forecasting financial statements

From the course: Finance and Accounting Tips

Start my 1-month free trial

Forecasting financial statements

“

- A common criticism I hear about accounting is that it's too focused on the past, it's about the financial history of a company. Well, managers and investors don't want to know about the past, they want to know about the future, and accounting leans too heavily on the past. - I'm going to go with Winston Churchill on this topic. He said, "The farther back you can look, "the further forward you are likely to see." Churchill, a student of history, understood that studying the past allowed one an educated glimpse into the uncertain future. - Studying and analyzing the historical performance of a company allows financial statement users to project the future performance of a company. We make some reasonable assumptions about a company's future performance and it is fairly straightforward to see what future financial statements might look like. - So, let's discuss forecasting a company's income statement. But the same concepts would apply if we were looking at the balance sheet. To begin,…

Contents