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    So Depending On Your View and Your Research About The Company, You Can Use Historical Data As A Starting Point and Adjust It Accordingly

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    iona4andal
    The document provides steps for forecasting revenue and cost of goods sold using historical data. It includes a sample income statement and revenue and cost of sales figures from 2013 to 2017. It explains that horizontal and vertical analysis can be used to analyze trends in revenue and costs. Forecasts for 2018 revenue and cost of sales are provided using different methods, such as compound annual growth rate, prior year growth rates, or average percentages from recent years. The appropriate forecasting method depends on research about the company's strategies and improvements.

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    So Depending On Your View and Your Research About The Company, You Can Use Historical Data As A Starting Point and Adjust It Accordingly

    Uploaded by

    iona4andal
    11 views3 pages
    The document provides steps for forecasting revenue and cost of goods sold using historical data. It includes a sample income statement and revenue and cost of sales figures from 2013 to 2017. It explains that horizontal and vertical analysis can be used to analyze trends in revenue and costs. Forecasts for 2018 revenue and cost of sales are provided using different methods, such as compound annual growth rate, prior year growth rates, or average percentages from recent years. The appropriate forecasting method depends on research about the company's strategies and improvements.

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    excel

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    excel

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    The document provides steps for forecasting revenue and cost of goods sold using historical data. It includes a sample income statement and revenue and cost of sales figures from 2013 to 2017. It explains that horizontal and vertical analysis can be used to analyze trends in revenue and costs. Forecasts for 2018 revenue and cost of sales are provided using different methods, such as compound annual growth rate, prior year growth rates, or average percentages from recent years. The appropriate forecasting method depends on research about the company's strategies and improvements.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    11 views3 pages

    So Depending On Your View and Your Research About The Company, You Can Use Historical Data As A Starting Point and Adjust It Accordingly

    Uploaded by

    iona4andal
    The document provides steps for forecasting revenue and cost of goods sold using historical data. It includes a sample income statement and revenue and cost of sales figures from 2013 to 2017. It explains that horizontal and vertical analysis can be used to analyze trends in revenue and costs. Forecasts for 2018 revenue and cost of sales are provided using different methods, such as compound annual growth rate, prior year growth rates, or average percentages from recent years. The appropriate forecasting method depends on research about the company's strategies and improvements.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 3

    Income Statement

    (P Mil)

    Revenues
    Net Sales
    Royalty and franchise fees
    Revenues
    Trend - Horizontal Analysis

    Cost of Sales
    As a % of Revenue - Vertical Analysis

    Steps - Forecasting Revenue using Historical Data


    1. Set up the historical figures.
    2. Do a horizontal analysis to see trend.
    3. Based on your judgement, you can forecast revenue using historical data from horizontal analysis.
    If you don’t have a view on how revenues will grow, you can just use Compound Annual Growth Rate (Rounded)
    However if you have researched the company and you think that their strategy can allow them to sustain
    revenue growth rate in 2017, then you can use that growth rate to forecast 2018. (Rounded)

    So depending on your view and your research about the company, you can use historical data as a starting point
    and adjust it accordingly

    Steps - Forecasting Cost of Good Sold Using Historical Data


    1. Set up the historical figures.

    2. Do a vertical analysis to see trend. Vertical analysis is used because cost of sales is a function of Revenue.
    Hence to study the trend you can study how Cost of sales as % of revenue changes during the year.
    If you don’t have a view you can just use averages (rounded)

    Or if you can see, it seems like there has been an improvement in cost of sales % for 2016 and 2017 compared
    to 2013-2015. If based on your research you have deemed that the improvements are permanent, (perhaps it
    is brought about by new technology) then you can opt to use average cost of sales % for 2016 and 2017 only.
    (rounded)
    Revenue
    2013A 2014A 2015A 2016A 2017A 2018 Forecast
    Using CAGR

    4,037.73 4,553.50 5,075.99 5,738.98 6,750.95 7,493.55


    116.56 142.99 168.35 206.63 252.86 280.68
    4,154.29 4,696.49 5,244.34 5,945.61 7,003.81 7,774.23
    13.05% 11.67% 13.37% 17.80% 11.00%

    3,240.79 3,638.50 4,048.38 4,158.59 4,937.72


    80.26% 79.91% 79.76% 72.46% 73.14%

    Formula/Actual Rounded
    11.01% 11%

    17.80% 18%

    77%

    73%
    Revenue Cost of Sales
    2018 Forecast 2018 Forecast 2018 Forecast
    Using Prior Year Average of 5 years Average of recent 2 years

    7,966.12
    298.38 Assumed Revenue: Assumed Revenue:
    8,264.50 7,774.23 7,774.23
    18.00%

    5,986.16 5,675.19
    77.00% 73.00%

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