Sample interview questions: What is your approach to forecasting revenue and expenses in a budget?
Sample answer:
Approach to Forecasting Revenue and Expenses
- Historical Data Analysis:
- Examine historical financial records to identify trends, seasonality, and patterns.
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Use statistical techniques, such as regression analysis, to establish baseline forecasts.
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Market Research:
- Conduct in-depth market analysis to assess economic indicators, industry trends, and competitive dynamics.
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Identify potential growth opportunities and risks that may impact revenue and expenses.
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Assumptions and Sensitivity Analysis:
- Develop a set of key assumptions based on research and expert input.
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Perform sensitivity analysis to assess the impact of changes in assumptions on forecast outcomes.
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Scenario Planning:
- Create multiple forecast scenarios based on different assumptions and external factors.
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Evaluate the potential impact of each scenario on the budget.
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Bottom-Up and Top-Down Approach:
- Utilize bottom-up forecasting to break down revenue and expenses into detailed components.
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Combine bottom-up forecasts with top-dow… Read full answer