How to simplify your forecasting

I do forecast modeling and scenario planning in Excel and it is quite simple:

  • Be clear on your assumptions — typically top left in the worksheet
  • Document your formulas by including a comment on input (column M below)

Follow these two points and you can easily update your model, or do a handover to your successor without too much training.

A simple forecast model in Excel

Price and cost per unit are constant throughout the year while volume is varying. I use three cases, which is typical for scenario planning:

  • Base-case
  • Upside
  • Downside

In addition I have included a monthly ramp-up percentage.

If your assumptions change (and they will!), you update your assumption in B2-B6 and your whole model will update — both your table, your graph and your scenarios.

This example displays a very simple forecast model, but the same principles applies to more extensive models.

How do you set up your forecasting?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this:
search previous next tag category expand menu location phone mail time cart zoom edit close