Introduction to forecasting
In accounting, forecasting is the process of using current and historic cost data to predict future costs. It is important to estimate and plan for costs prior to incurring them.
Here is an income statement example of Peopledrift, Inc. to demonstrate forecasting line items:
|
Forecasted |
||
|
Income Statement |
2021 |
2022 |
|
Sales |
$ 800.00 |
$ $960.00 |
|
Cost of Sales (COGS) |
$ 520.00 |
$ 624.00 |
|
Gross Profit |
$ 280.00 |
$ 336.00 |
|
SGA Expense |
$ 100.00 |
$ 120.00 |
|
Depreciation |
$ 20.00 |
...|
