A budget for a future month or quarter, which is added to an organization's budget as the past month or quarter is dropped. The entire period's budget is revised and updated as necessary, prompting management to continuously consider short-range plans.
Cost prediction involves forecasting future cost levels based on historical cost behavior using various statistical techniques, such as linear regression, to inform budgeting, decision-making, and strategic planning.
The Delphi Technique is a forecasting method used to predict a future event or outcome by eliciting expert opinions. Experts provide initial forecasts independently, followed by rounds of consensus to refine the predictions and discard extreme views.
Enterprise Performance Management (EPM) refers to the process-based framework and software modules that help businesses manage and improve performance through analysis, planning, monitoring, and control mechanisms. Specifically, EPM encompasses budgeting, forecasting, financial reporting, and scorecarding techniques.
Expected Actual Capacity refers to the forecasted production or service output that a company anticipates under normal conditions, taking into account scheduled downtime, maintenance, and other operational factors.
Extrapolation involves estimating unknown values by extending or projecting trends or patterns observed in existing data beyond the known data set.
A financial budget is an organizational tool that outlines an entity's monthly, quarterly, or annual financial goals and expectations, aiding in financial planning, forecasting, and control.
Financial planning involves the formulation of short-term and long-term plans in financial terms to establish goals for an organization to achieve, against which its actual performance can be measured.
Forecasting involves estimating future trends. Stock market forecasters try to predict the direction of the stock market by relying on technical data of trading activity and fundamental statistics on the direction of the economy. Economic forecasters attempt to predict the strength of the economy, utilizing complex econometric models to make specific predictions of future levels of inflation, interest rates, and employment.
Modeling refers to designing and manipulating a mathematical representation that simulates an economic system or corporate financial application to study and forecast the effects of changes.
Prediction refers to the foretelling of a future event, often as a probabilistic estimate based on various estimation methods, including analysis of past patterns and statistical projections of current data.
A projection is an estimate of future performance made by economists, corporate planners, and credit and securities analysts to anticipate economic and financial conditions.
The Random Walk Theory posits that the movement of stock and commodity futures prices is inherently unpredictable, given that past price movements cannot accurately forecast future price trends.
Rational expectations refer to the hypothesis in economics that individuals make decisions based on their best available information, forecasting future economic variables as accurately as possible.
A rolling budget, also known as a continuous budget, is a financial planning method that is regularly updated by adding a further budget period, such as a month or a quarter, while concurrently excluding the earliest month or quarter.
The use of historical data and mathematical techniques to model the historical path of a price, demand for a good, or consumption. Time series analysis is based on the premise that by knowing the past, the future can be forecast.
