A rolling forecast is not only about seeing the future unravel, but a constant evaluation of the management team to see if they are able to adjust their operations on time. Without it, any form of strategic planning becomes useless. Below you find a real-life case. Step-by-step each question will be briefly discussed. It is about a foreign business unit, which was part of a large European corporation, on the brink of a crisis.

In this article, Steve Morlidge argues that the quality of business forecasting is unacceptably poor. He goes on to present six simple principles that will help executives significantly improve the performance of their forecast processes.

Disclaimer: Financial Modelling has no strict “right” or “wrong” method of application. It does, however, have forms of best practice and this what this article attempts to highlight

The first step in forecasting is to understand where we are today and how we arrived at that point from the past. This is gain through analysis and reporting. 

Increasingly, managers are now looking to change the corporate planning process and replace the traditional annual budget with rolling forecasts, 12, 13 or 15 months ahead. What is the reason for this development?

Statistical approaches to forecasting can provide a framework for creating rolling budgets to which analytical skills and judgment can be applied in supporting a sound budgeting process.