Lesson: Forecasting

In this lesson, Nick Palazzolo, CPA, demystifies the differences between forecasting and projection by underscoring the real-world applications and importance of each. With a practical approach, he illustrates how forecasts use historical data and actual expectations to give a realistic picture of future cash flows, such as a 13-week cash flow model for external reporting or internal budget management. He also delves into projections, explaining that they deal with “what-ifs” to anticipate the outcome of various hypothetical scenarios, from economic downturns to inflation, guiding through sensitivity and scenario analysis as key tools in this process. Nick's emphasis on using these financial tools effectively offers a clear understanding of how they serve businesses in planning and decision-making.