The document outlines the attributes of a good revenue forecast, emphasizing the importance of a robust financial model that includes a balance sheet, income statement, and cash flow. It highlights the need for realistic assumptions, detailed revenue verticals, and sensitivity analysis supported by industry benchmarks and contracts. Additionally, it specifies various sources of information such as technology incubators, networking with peers, and internet resources.

1. Presented
by:
Date:
Michele
Middlemore
CA,
CPA
CFA
CBV
Michele.middlemore@mnp.ca P:
416-­‐515-­‐5036
March
9,
2016
FORECASTING
REVENUE

2. Page 2
ATTRIBUTES
OF
A
GOOD
FORECAST
• Robust
financial
model
– Balance
Sheet
– Income
Statement
– Cash
Flow
(monthly)
• Flexible
for
key
variables
to
allow
for
sensitivity
analysis
• Clearly
stated
assumptions
and
verifiable
support
for
same
– Industry
benchmarks
• Growth
rates
(ramp
up/steady
state)
• Profit
margins
• Turnover
ratios
(e.g.
inventory/accounts
receivable)
• Industry
specific
critical
success
factors
(subscriber
rates/page
views
etc.)
– Underlying
contracts/purchase
orders
– Strategic
partnerships
– Supplier
quotes

3. Page 3
ATTRIBUTES
OF
A
GOOD
FORECAST
• Realistic
and
internally
consistent
assumptions
• Line
item
detail
– Revenue
verticals
• Contingency
provision
• Sources
and
Uses
of
Funds
– Operating
expenses
– Capital
expenditures
– R&D

4. Page 4
SOURCES
OF
INFORMATION
• Technology
incubators/Innovation
hubs
– MaRS Market
Intelligence
• Peers/networking
– Serial
Entrepreneurs
– Angel
Groups
– Financial
Advisors
– Venture
Capital
Firms
– Industry
Participants
• Internet
– Government
websites
(e.g.
Statistics
Canada)
– Google