Financial Projection

Description: Financial projection is an essential tool in business planning that allows estimating future financial results of an organization based on historical data and assumptions about the future. This process involves creating financial models that reflect expectations of income, expenses, investments, and cash flows. Through financial projection, companies can anticipate their economic performance, identify trends, and make informed decisions about resource allocation. Projections can cover different time horizons, from short-term (monthly or quarterly) to long-term (annual or multi-year). Additionally, these projections are fundamental for budgeting, obtaining financing, and evaluating investment projects. The accuracy of financial projections depends on the quality of the data used and the company’s ability to foresee changes in the economic environment and its own business model. In summary, financial projection not only helps companies plan for their future but also allows them to adapt to market dynamics and the changing needs of their customers.

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