Methods or Techniques of Financial Forecasting

1. Use of Cash Budgets

A cash budget is a financial statement showing as:

a) Sources of capital and revenue cash inflows

b) How the inflows are expended to meets capital and revenue expenditure of the firm.

c) Any anticipated cash deficit/surplus at any point throughout forecasting period.

2. Regression Analysis

This is a statistical way which includes identification of independent and dependant variable to form a regression equation *y = a + b x) on that forecasting will be based.