Ways in checking your forecasting
Say I have forecasted the income statement and balance sheet
but how do I know if my forecasts are reasonable and more or less accurate?
are there ways to check it?
I am going to guess most will suggest Sensitivity Analysis
You could browse over some analyst estimates and see how your numbers line up.
when you say forecasted income statement and balance sheet are you talking about using a mathematical formula to predict the expected income of a company. Im not an accountant major and I use forecasting for stock analysis but what your talking about is intriguing
Use ratios like ROC/Days Receivable/Days Payable etc to make sure your assumptions aren't way off. You can try to check these with peers and if you see something weird like 100 days outstanding vs industry of 50 days then you'll know you have something off.
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