Tag: budget

Regression Analysis in Financial Modeling

Regression Analysis represents a set of statistical methods and techniques, which we use to evaluate the relationship between variables. These are one dependent variable (our target) and one or more independent variables (predictors). We have three primary variants of regression – simple linear, multiple linear, and non-linear. However, most of the time, we use linear […]

Forecast Sales Performance and Seasonality

We are approaching the second half of the year, and before we know it, it will be the time of year to start working on our projections for next year and the company’s annual budget. There are many complex and detailed models that we can utilize to forecast the sales performance of the business for […]

Rolling Forecasts in Financial Planning

Let’s start by looking at why businesses need rolling forecasts. When running a business, we need to have a full view of what’s happening so that we can make the proper decisions. The best way to achieve this is to implement a budgeting and planning process. We create an expected standard performance for the business […]

Understanding The Value of a Budget

Introduction Running a business poses the threat of getting lost into the day-to-day issues the company faces. And this can mean we start to miss the bigger picture. Investing time and resources in creating a budget and a business plan is essential to ensure we form a proper long-term strategy for the business. A budget […]

CAPEX, Depreciation and Amortization in Financial Modeling

If you are already familiar with the outlined concepts, maybe you would be more interested in taking a look at the Excel model, which you can download below the article. Introduction Long-term (non-current) assets of the company have a long useful life (more than one year). When acquiring capital assets, we aim to use them […]

Estimating Fixed and Variable Costs with the High-Low Method

Introduction The High-Low Method is a technique of cost accounting, which is used to split mixed costs into variable and fixed components. It is essential to note that the High-Low method is not very popular as it relies on extreme values of the population and can distort the cost distribution. However, the technique is one […]