How secure are your forecast revenues and profits? In the last blog I dealt with the question of Forecast Gross Margins. Another hard lot of questions you will have to answer will be to do with your historical and forecast sales and profits. The hardest part of any sale is convincing an acquirer that the business is going to meet its forecasts. All acquirers will argue that the best guide to future performance is the current and past performance. If: you develop budgets and forecasts and report actuals against these forecasts on a monthly or quarterly basis, and your actuals are generally as good or better than your forecast, then you have started to provide a measure of comfort. You will need to look at each line item in your forecasts and if they show a steady progression and that is what you have always done, then there should not be a problem. However, if you are forecasting a rapid … [Read more...]
