Financial Forecasting Basics

About this course

A forecast is a structured best guess about the future, and its value lies in showing what must be true for the numbers to work. This course explains what forecasts are for, how to identify the drivers that matter most, how to build a simple driver-based model and how to test scenarios and communicate uncertainty. The skills here are general and not financial advice.

What you will be able to do

• You'll be able to explain the purpose of a forecast and who will use it
• You'll be able to identify the key drivers that move a business's results
• You'll be able to build a simple driver-based model in a spreadsheet
• You'll be able to test scenarios and communicate uncertainty honestly

Course outline

1. What Forecasts Are For

   11 min · Lesson notes, example, action task · 2-question quiz

   A forecast helps people decide what to do now, by showing likely outcomes under clear assumptions. It is a planning tool, not a promise, and it should be updated as facts change.
2. Identifying Key Drivers

   11 min · Lesson notes, example, action task · 2-question quiz

   Drivers are the few factors that move most of a business's results, such as customer numbers, average spend and staff hours. Finding them keeps a forecast simple and useful.
3. Building a Driver-Based Model

   11 min · Lesson notes, example, action task · 2-question quiz

   A driver-based model links each output to its drivers in formulas. When an assumption changes, the forecast updates automatically and you can see the effect straight away.
4. Scenario Testing

   10 min · Lesson notes, example, action task · 2-question quiz

   Scenarios show what happens if key drivers move in different directions. A base case, a downside and an upside give decision-makers a realistic range rather than a single number.
5. Communicating Uncertainty

   10 min · Lesson notes, example, action task · 2-question quiz

   No forecast is certain. Good forecasters show the range of likely outcomes, state their assumptions and explain what would change the picture, so decision-makers can act with confidence.
6. Tools you'll need

   6 min · Lesson notes, example, action task · 2-question quiz

   Most driver-based forecasts are built in spreadsheets, which are powerful and widely understood. Specialist planning tools can help once models get large or shared by many teams.
7. Careers & next steps

   6 min · Lesson notes, example, action task · 2-question quiz

   Forecasting skills are used in finance, FP&A, strategy and business analysis roles. This lesson sets out where they can lead and how to check what the work is worth.
8. Final quiz and certificate

   10 questions, pass mark 8 of 10. Pass to get your Reesby Academy certificate with a verification link.