#forecasting
Financial forecasting techniques for better business planning
AFN equals required asset growth minus spontaneous liabilities minus retained earnings — the outside funding your sales forecast demands.
Cube starts around $30,000/year, Jirav around $10,000, Datarails is quote-based — pick by where your team models: Sheets, web app, or Excel.
The relevant range is the activity band where fixed costs stay fixed — cross a capacity boundary and your break-even math silently breaks.
FP&A turns closed books into budgets, rolling forecasts, and variance reports — start with one quarterly cycle, then hire when decisions outrun it.
XYZ sorts SKUs by demand variability, FSN by movement speed, VED by criticality — cross them with ABC to set safety stock, review cycles, and exit plans.
The Balanced Scorecard turns strategy into measures across financial, customer, process, and learning perspectives — linked bottom-up in one cause-effect chain.
Kaizen budgeting builds yearly cost cuts into the plan; beyond budgeting swaps the annual budget for rolling forecasts and relative targets.
NPV discounts every future cash flow to today's dollars at your hurdle rate — a positive total means the project creates value, so accept it.
IRR is the discount rate that zeroes a project's NPV — accept only above your cost of capital, and cross-check high readings with MIRR.
Profitability index is the present value of inflows over the initial investment — fund projects above 1.0, highest PI first when the budget is capped.
Free cash flow is operating cash flow minus CapEx — the cash left after maintaining your assets. How to calculate it, read it, and fix it.
A master budget rolls your sales, production, and cash budgets into one annual plan — build each schedule in sequence, then compare actuals monthly.
