FINANCE MANAGEMENT

Qn.

Being the Finance Manager of a company how will you make a financial forecasting?


Finance is one of the basic foundations of all kinds of economic activities and it is the lifeblood of a Business Enterprise. Financial forecasting is very important in the running of a Business Enterprise. It is the duty of Finance Manager to make a financial forecasting.
Financial forecasting is the estimating of cash repeats and payments for a future period before any adjustments have been made. If implies the technique of determining in advance the requirement and utilization of funds for a future period. It is a systematic presentation of data in the form of financial statements, ratios, involving technique.

Financial forecasting helps in the following ways.

v It reveals any expected surplus of cash or shortage of cash
v Its generates the information useful for financial decision making
v Provides required information for successful financial planning
v It reveals the seasonal requirements of cash such as payments of income tax.
v Its supports good investments and financial policies.

Forecasting is the first stage in the planning process. The forecasting techniques should, there fore, not only be simple but also give precise results. Induction of computers results the total revolution in the forecasting techniques. As a finance manager I have to follow the following forecasting techniques.

Percentage of sales method
It is one of the simplest methods it relates to the sales and comparers between the sales and other items in terms of percentage. Since sales have a significant effort on the financial needs of a business, hence different items of assets and liabilities, revenue, and expenses can be expressed as a percentage of sales. ...... and more....pls satisfy our terms and conditions.

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