What are the reasons the following types of companies would need a financial forecast?
I need to know the reasons the following types of Companies would need a financial forecast: brand new company, family owned company, and a long-standing corporation.
Brand new company:
Because any (responsible) investor wants to know how hard they can expect their money to work before investing in any business. It also sets a productivity target for employees.
Family owned company:
At the very least, the family that owns the company wants to make sure they will be able to eat in the next month, quarter, or year if their sole source of income is that business. It also keeps the employees informed of current market conditions.
Long standing corporation:
It is required by the SEC, and it is the yardstick by which many stock investors gauge management's capabilities. The same reasons apply here as for the new company and family owned company.
Fro all cases, it gives the owners/managers a chance to change coarse if needed, and give them a firm ground on which to build goals and future growth projections.
2 Responses to “What are the reasons the following types of companies would need a financial forecast?”
Brand new company:
Because any (responsible) investor wants to know how hard they can expect their money to work before investing in any business. It also sets a productivity target for employees.
Family owned company:
At the very least, the family that owns the company wants to make sure they will be able to eat in the next month, quarter, or year if their sole source of income is that business. It also keeps the employees informed of current market conditions.
Long standing corporation:
It is required by the SEC, and it is the yardstick by which many stock investors gauge management's capabilities. The same reasons apply here as for the new company and family owned company.
Fro all cases, it gives the owners/managers a chance to change coarse if needed, and give them a firm ground on which to build goals and future growth projections.
Comment made on April 2nd, 2009 at 11:04 pmReferences :
All have the same concerns:
The need to hire future workers.
The need to buy more supplies.
The need for loans.
Can they expand or should they stay the same size.
Comment made on April 2nd, 2009 at 11:38 pmReferences :
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