Forecasting Trend Analysis
Trends can impact forecasting in business. Financial trend analysis can help a company know if they are growing or shrinking by reviewing financial statements for at least three years. Common-size income statements are used to divide each line by sales giving a percentage of sales spent on these items. Common-size balance sheet is done by dividing the assets and liabilities by the total. Historical analysis looks at the balance sheets of current and past years to evaluate any fluctuations.
There are also non-financial factors which could affect forecasting. The increase or decrease in competition can affect sales for the company. This is why it is best to keep an eye on the competition to see what they are doing. Governmental policies on companies can affect how the company operates. The customers opinions of business ethics, the condition of the economy, and what environmental conditions of the company. There are also internal factors such as hiring, compensation policies, organizational structure, and management’s abilities for leadership. With all