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Types Of Financial Forecasts

2011/1/6 11:20:00 42

In order to facilitate research and grasp financial forecasts, people often

Basis

Different standards are used to classify them.

1. according to the length of time predicted by financial forecasts, they are divided into long-term forecasts, medium range forecasts and short-term forecasts.

Long term prediction mainly refers to the financial changes over the past 5 years and the trend prediction, which provides financial basis for the major decisions of enterprises in the long term development.

Medium term forecasts mainly refer to the prediction of financial changes and trends over 1 years or less than 5 years. They are the basis for long-term prediction and short-term prediction.

Short term prediction refers to the prediction of financial changes and trends within 1 years, mainly for the preparation of short-term plans such as annual plans and quarterly plans.

2. according to the contents of financial forecast, it can be divided into capital forecast, cost and cost forecast, business income forecast, profit forecast and sales forecast.

3. according to the financial forecast method, it can be divided into qualitative financial forecast and quantitative financial forecast.

Qualitative prediction is carried out by judging the various factors and attributes of things.

Forecast

The way it is

establish

On the basis of empirical judgement, logical thinking and logical reasoning, the main characteristic is to make use of intuitive materials and rely on the comprehensive analysis of personal experience to predict the future situation of things.

The qualitative prediction methods often adopted include expert meeting, Phil investigation, interview, on-site observation and discussion.

Quantitative prediction is a method of forecasting by analyzing the quantitative relationship between various factors and attributes.

Its main characteristic is to find out its inherent rule based on historical data, apply coherence principle and analogy principle, and predict the future situation of things by mathematical operation.

There are many methods for quantitative prediction. There are time series prediction methods (including arithmetic average method, weighted average method, moving average method, exponential smoothing method, least square method, etc.), related factors prediction method (including linear regression method, multiple linear regression method), and probability analysis and prediction method (mainly Markov prediction method).

The above two kinds of methods are not isolated from each other. They often need to be used comprehensively when making financial forecasts.