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How Many Projections Do You Have for 2010?

I am wondering how many different sets of projections everyone has for 2010.  Some go with just one.  Others like to use three - high, medium, and low.  Still others have more than that.

Depending on the situation, I usually function with 2 or 3 financial plans for the year and track progress against each of them.  How many do you have in place for 2010?

I wrote a blog post about this a while back: How Many Forecasts Do You Have?  I am interested in everyone's feedback and logic.  Thanks!

Answers

Mark Stokes
Title: CFO
Company: Private
(CFO, Private) |

I have an infinite number. Or so it seems. I'm one of those folks who draws a careful distinction between "budget" and "forecast".

The budget gets locked in early in the year and remains in place all year long. You never change the budget (barring extraordinary circumstances. A forecast is something that is of the moment. Although you can lock in a forecast (e.g. compare Q3 actuals to the forecast you created in Q2 for Q3 - with me?), newer forecasts are update with newer information.

Then there is the matter of how many model variants to run for any of those, budget or forecast. And I have found that I run dozens of scenarios for each, but I always end up with one. That one has the best knowledge and understanding of the organization built into it, along with our implicit stamp of approval b/c we put it out as the final product.

I find the High, med, low scenarios to be part of baking that final item. Not that they don't have their place, but when my board looks at me for answers, they are typically not looking for a range: they are looking for my one best answer. I may preface by saying that there are a range of outcomes from A-C, but B is what we're betting on as highest probability right now. And at the end of the day, the board is typically looking for you to hang your hat on something and this enables that to happen.

Peter Lyons, MBA, CMA
Title: Finance and Technology Enthusiast
Company: Currently Looking
(Finance and Technology Enthusiast, Currently Looking) |

We use a hurricane type model that produces a base case, upside scenario and downside scenario.

As we get further along in the year, the cone becomes narrower.

David Cole
Title: CPA, CVA, CRFAC, CGMA
Company: Haines, Isenbarger & Skiba LLC
(CPA, CVA, CRFAC, CGMA, Haines, Isenbarger & Skiba LLC) |

Peter, the label sounds interesting...is that something you placed on your spreadsheet model, or is it a commercial package?

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