Preparing an Operating Budget—Forecasting Sales and Revenues

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Using trends to predict sales

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Key Idea

Sales projections for a given period are developed by product or product group. If you are forecasting product sales, consider whether it is appropriate to base your forecasts on current sales trends. Some factors to consider, in addition to overall demand trends for these types of products, are:

  • The history of sales growth for your company's products
  • Competitive products that have or may be introduced in the market
  • Availability of substitute products
  • Price sensitivity of purchasers
  • Percentage of purchasers who demonstrate repeat purchases
  • Planned changes in sales and promotion activities

Can current sales trends inform your forecasting?

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