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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (1097)	5/12/2003 2:27:13 PM
From: zonder	Read Replies (1) \| Respond to of 4912

Grace - I am not saying financial forecasting is an exact science. It is not. However, it is not correct either to say you are "extrapolating from the past". I have been an analyst (thankfully, before the term became a swear word) and have done quite a few of these models myself. Yes, you do start out with the last published statements. Then you take the past data as INDICATORS - like, what has the average inventory turnover been, etc. You do NOT go, "Oh sales increased 5% last year, so it will increase 5% this year" (if you're a real analyst, that is...) You talk to the company, have a feel for what their sales, expenses, etc are going to be THIS year. Not last year, or the ten years before...