Financial forecasting takes many different shapes. It is typically used to reassure a company that they’re headed in a profitable direction, to point out the need for change, or to figure out which industries and/or countries it would be best for a company to expand into to increase profits.
Internal forecasting refers to projected effects of company financial practices and/or changes. External forecasting refers to the projected effects of an industry or region on a company’s finances. Hogg, Shain, & Scheck offers both types of forecasts for businesses in the Greater Toronto Area with the following services:
Forecasts of Current Practices
A projection of how a company’s finances will look in a defined future (e.g. one, five, ten years) if income and expenses continue as currently practiced. This is a base forecast that can be used to compare actual results against forecasts of outside influences. A one-year analysis can also be used to estimate a company’s success in the coming year for tax planning or other purposes.
Forecasts of Changed Practices
A projection of what will likely happen to a company’s finances, if certain internal changes are made now. This forecast is especially useful when a company is uncertain about changing a practice, or when there are a number of changes to choose between. Which will be most effective? Are any speculated changes likely to hurt, rather than help the company long term? When effects of changes are compared together what happens? Changes can include production or sales of new products, alteration of accounting methods or pricing, company reorganization or relocation, etc.
A projection of how a company’s industry is likely to fare in a defined time period. This can be used in at least two ways: To choose which industry would be most profitable to target for future growth, if a company already serves more than one; and to compare potential industries, if a company wants to enter a new one.
Comparison of External vs. Internal Forecasts
A comparison of projections of regional, national, and/or international economic forecasts to see how a company’s finances are likely to be affected from the outside. This is similar to an industry forecast and can be used in a similar way – to protect one’s company against regional economic changes or to choose between countries for exporting purposes.
Effects of Projected Changes in Economy
This is the most detailed, comprehensive financial forecast of all. This forecast analyzes the potential effects on a company if key factors in Canada’s economy change. It can be used for changes in the local economy or in that of another country.
If you think your business could benefit from the financial forecasting services at Hogg, Shain and Scheck, contactus today at 647 557 7591.