How can you use forecasting to support long-term corporate strategy?

The purpose of forecasting needs to be clearly aligned. Are we merely projecting future outcomes, or are we planning strategies to achieve specific targets driven by external factors, such as investor requirements? If this alignment is not established, the outcome may not match the intended objectives. If you, as a corporate finance professional, are uncertain about this, then the collaborators who provide information to you will likely be even more unsure. Consequently, they might only provide what they think is correct, rather than what is actually needed.

Think of forecasting as your corporate crystal ball, but with less beard and more spreadsheets. It helps you peek into the future and avoid tripping over banana peels like disruptive tech or market meltdowns. Use it to set realistic goals, build a budget that won't make accountants cry, and plan investments that won't leave you saying "we should've seen that asteroid coming!" It's basically future-proofing your strategy with a healthy dose of "what if?" and a pinch of "don't panic, we've got this." So go forth, strategize confidently, and remember, even if the crystal ball gets cloudy, at least you won't be left in the dark!

For informational purposes only, transforming a business story into a financial forecast involves dissecting key narratives. Start with revenue drivers; understand how market trends and customer behavior influence sales. Factor in operational costs, considering scalability and efficiency. Address risks and uncertainties, acknowledging their impact on projections. Lastly, craft a narrative around financing needs and potential sources. Remember, a forecast is a dynamic reflection of your business journey.

Dans un cas pratique , la meilleure approche à mon humble expérience est de se fixer d'abord les objectifs que l'entreprise veut atteindre , la deuxième étape est de mettre en place la stratégie d'entreprise afin de les concrétiser et ainsi mettre en place les indicateurs clé de performances pour mesurer le degré d'achèvement cela permet aussi d'avoir un plan d'affaires qui donnera une visibilité accrue pour le dirigeants , tout ?a est chiffré par des prévisionnels comme un plan de financement assez réaliste.

Budgeting is a long-term process that aligns organizational targets with vision and goals for the upcoming year, providing a strategic roadmap. In contrast, forecasting is short-term, updating the budget with real-time data to adapt to changes promptly. The 2020 budget, disrupted by the pandemic, exemplifies the need for forecasting to realign targets. Together, budgeting and forecasting empower organizations to navigate uncertainties, align strategies with real-time data, and foster resilience in the face of unexpected challenges.

For informational purposes only, building an adaptable rolling forecast is key in today's dynamic financial landscape. It's about regularly updating projections based on real-time data, not just historical trends. This approach allows businesses to swiftly adjust strategies, responding to market shifts. Embrace a flexible model, incorporating variables like economic indicators, industry trends, and geopolitical factors. Encourage cross-functional collaboration for diverse insights. Remember, the goal is agility in decision-making, enhancing resilience in uncertain times.

Dans ce cas précis avant d'entamer une stratégie alternative concrétisée dans un tableau prospectif de Nortan & Kaplan , il faut mettre en place et analyser son affaire avec l'aide de la matrice SWOT qui permet non seulement de résumer les facteurs endogènes et exogènes mais aussi de réaliser une modélisation financière reflétée à la fin par un plan de financement étalé sur le moyen terme et utiliser "What if analysis" par exemple pour avoir des scenarios sur lesquels les dirigeant d'entreprise peuvent tenir compte dans leurs prise de décisions.

Le cas de la structure des capitaux permanents " Capital & dettes financières" , dans la réalité de l'entreprise ,plus spécifiquement du DAF et en référence à la théorie financière de Modiglianni & Miller" qui explique qu'il n'existe pas une structure des capitaux permanents qui maximise la valeur de l'entreprise , cependant il est très intéressant d'avoir des financements en capitaux propres en premier lieu mais dans le cas de la croissance très rapide de l'entreprise il est impérative de recourir à l'endettement afin d'avoir un effet de levier financier qui permettra une rentabilité financière la plus optimale aussi.

For informational purposes only: Budgets are like financial roadmaps, revealing potential bottlenecks in an organization's journey. They offer a structured view of expected income and expenses, highlighting areas where resources might be constrained. Monitoring budget variances helps pinpoint inefficiencies, like overspending in certain departments or unexpected costs. A well-crafted budget acts as a diagnostic tool, showcasing where adjustments are needed. However, it's essential to recognize that budgets operate in a dynamic environment – unforeseen events can disrupt even the most meticulously planned financial paths. Regularly revisiting and adjusting budgets ensures adaptability and resilience in navigating financial landscapes.