Forecasting Revenue Using Regression

The revenue is a function of sales and therefore the requirement is to approximately forecast the sales for the year.

Forecasting revenue using regression. Follow me to learn more amazing data tips. There you have it. A thorough understanding of the company s cost functions is. A 8 method 6 least square regression.

Every year as part of organizations annual planning process a requirement is to come up with a revenue target upon which the budget of the rest of the organization is based. Fiscal stress has forced local governments to pay increasing attention to revenue trends and has increased the importance of financial forecasting in local government. Predictions of future revenue will be determined at quarterly intervals. Linear regression or least squares regression lsr is the most popular method for identifying a linear trend in historical sales data.

You will use the revenue values already available in your microstrategy project. In this setting the forecaster assumes possible scenarios for the predictor variables that are of interest. Stay tunned for more excel tips later using multiple regression. Regression analysis is a quantitative tool that is easy to use and can provide valuable information on financial analysis and forecasting.

The method calculates the values for a and b to be used in the formula. While this article focuses on using linear regression tools in excel for forecasting revenue linear regression can also help model a variety of business situations. Y a bx. Have fun playing around with excel.

Forecasting revenue using linear regression. The equation describes a straight line where y represents sales and x represents. After reviewing the role of revenue forecasting in financial planning and discussing the use of regression and econometric analysis in revenue forecasting this article applies this technique to forecast several key revenue.