REVENUE PROJECTION Assignment Essay


REVENUE PROJECTION

Supporting your projected revenue growth
Forecasting revenue of a business should have a high degree of accuracy. You have to convince the investor to put money into the business hence its necessary to provide a set of thoughtful forecasts. In supporting the revenue projection, you can provide key ratios like gross margin ration to support growth projection. The ratios have to be realistic and substantiated to attract the investor. Moreover, you can prove to the investor that all factors that affect revenues were considered in the projection and provide a reasonable timeline of cash flows which gives the investor more confidence. There are ways in which you can support the projected growth. First, you can develop and present detailed historical data showing trends and analysis of the growth. The pattern for the previous periods may serve an evidence for future growth. (Caruthers, 1997)
Second, you can show a cross examination of what the company does and how well It does it to generate revenue. This will prove its ability to generate revenue In the future if its activities are viable. Moreover, you can show an analysis of the present competitive situation and what management expects pertaining to the future ability of the firm to generate revenues amidst competition in the market.
Developing a revenue model demonstrates to the investor the plan to earn revenues and shows when you are going to start making revenue (Klay, 1983)
Third, for the investor to be convinced of the projection, you can base the estimates on market facts like inflation rates and stock prices in the economy. Such variable in the economy are key to investment decisions hence any investor would develop a keen interest to their analysis. This may proves to the investor that all material factors that affect revenue growth have been considered in the prediction model.

REFERENCES
Caruthers, J. K. (1997). .Methods and techniques of revenue forecasting. .
Klay, W. E. ( 1983). Revenue forecasting: An administrative perspective. Handbook on Public Budgeting and Financial Management.: Marcel Dekker, 287-315. New York.

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