ANNUAL OPERATING BUDGET FORECAST

YEAR ACTUAL FORECAST

1 2 3 4 5 6
JAN No Data
FEB No Data
MAR No Data
APR No Data
MAY No Data
JUN No Data
JUL No Data
AUG No Data
SEP No Data
OCT No Data
NOV No Data
DEC No Data
- - - - - -

JANUARY JULY Historica

12 12 1
10 10 1
8 8 1
6 6 1
4 4 1
2 2 1
0 Revenue Linear (Revenue) 0 Revenue Linear (Revenue) 0
1 2 3 4 5 1 2 3 4 5 0
0
0
- Reve
FEBRUARY AUGUST 1 2
15 12
10
10
8
5 6
0 4
1 2 3 4 5 2
Revenue Linear (Revenue) 0 Revenue Linear (Revenue)
1 2 3 4 5

MARCH SEPTEMBER
12 15
10
8 10
6 5
 MARCH SEPTEMBER
12 15
10
8 10
6 5
4
0
2
Revenue Linear (Revenue) 1 2 3 4 5
0 Revenue Linear (Revenue)
1 2 3 4 5

APRIL OCTOBER
12 12
10 10
8 8
6 6
4 4
2 2
0 Revenue Linear (Revenue) 0 Revenue Linear (Revenue)
1 2 3 4 5 1 2 3 4 5

MAY NOVEMBER
12 12
10 10
8 8
6 6
4 4
2 2
0 Revenue Linear (Revenue) 0 Revenue Linear (Revenue)
1 2 3 4 5 1 2 3 4 5

JUNE DECEMBER
12 12
10 10
8 8
6 6
4 4
2 2
0 Revenue Linear (Revenue) 0 Revenue Linear (Revenue)
1 2 3 4 5 1 2 3 4 5
 USING THE REGRESSION MODEL
INTRODUCTION
Please review the Basic Regression session provided by th
BUDGET ADJUST R http://www.investopedia.com/articles/financial-theory/0
analysis-basics-business.asp
5 FACTOR FACTOR (cut and paste if necessary)
100% No Data
The session will provide you with a working knowledge o
100% No Data Analysis. Do not focus on the math unless you are comfor
100% No Data statistics. Move on to the practical use of the information
100% No Data WORKING WITH YOUR DATA
100% No Data In this model, we will be using a matrix of annual data. It
build a budget based on monthly income streams across
100% No Data Please obtain your monthly revenue for the past 5 years -
100% No Data insert into the open cells. Note - the formula cells are pro
prevent over writing them inadvertently.
100% No Data
100% No Data INTERPRETING THE HEADERS
ACTUAL: This region reflects your actual data for the past
100% No Data
100% No Data FORECAST: This region reflects the calculated revenue for
or year. It is constructed to look across all 5 years.
100% No Data @forecast(revenue,years)
- BUDGET: This region is for comparing your final budget fo
your actual budget for year 5. You will need to use the mo
or two for this comparison to be useful. I use this region t
my forecast did against the actual revenue per month.
R - FACTOR: From your online seession - you learned the
measure of validity. It ranges between -1 and +1. The clo
to this range the the stronger the predictability of the for
values less than .5, try and compile as much additional in
your upcoming budget as possible to help set that revenu
Historical Revenue by Year better.
1 @correlation(revenue, years)
1 ADJUSTMENT FACTOR: I use this region to tweak each m
1 depending on the strength of the r factor, economic turns
1 added information that will be helpful in getting at the be
forecast - the best not the biggest.
1
1 THE CHARTS
0 MONTHLY: The model automatically builds a chart of each
0 history and inserts a trend line with the next period forec
0 HISTORICAL: The model creates a chart representing the
0 with a trend line depicting the forecast of the next period
- Revenue Linear (Revenue)
1 2 3 4 5
ON MODEL

ression session provided by this link:

m/articles/financial-theory/09/regression-

u with a working knowledge of Regression

e math unless you are comfortable with
actical use of the information.

ATA
ng a matrix of annual data. It is designed to
nthly income streams across five (5) years.
revenue for the past 5 years - Jan - Dec and
ote - the formula cells are protected to
nadvertently.

DERS
your actual data for the past 5 years.
cts the calculated revenue for the next period
ook across all 5 years.
ars)
comparing your final budget for year 5 with
5. You will need to use the model for a year
o be useful. I use this region to see how well
actual revenue per month.
ne seession - you learned the r factor is
s between -1 and +1. The closer the r value is
er the predictability of the forecast. For r
ompile as much additional information about
ossible to help set that revenue estimate

years)
e this region to tweak each month's estimate
of the r factor, economic turns, or what ever
be helpful in getting at the best revenue
iggest.

matically builds a chart of each month's

ne with the next period forecasted.
ates a chart representing the annual revenue
he forecast of the next period.
USING THE REGRESSION MODEL
INTRODUCTION
Please review the Basic Regression session provided by this link:
http://www.investopedia.com/articles/financial-theory/09/regression-
analysis-basics-business.asp
(cut and paste if necessary)

The session will provide you with a working knowledge of Regression

Analysis. Do not focus on the math unless you are comfortable with
statistics. Move on to the practical use of the information.

WORKING WITH YOUR DATA

In this model, we will be using a matrix of annual data. It is designed to
build a budget based on monthly income streams across five (5) years.
Please obtain your monthly revenue for the past 5 years - Jan - Dec and
insert into the open cells. Note - the formula cells are protected to
prevent over writing them inadvertently.

INTERPRETING THE HEADERS

ACTUAL: This region reflects your actual data for the past 5 years.
FORECAST: This region reflects the calculated revenue for the next period
or year. It is constructed to look across all 5 years.
@forecast(revenue,years)
BUDGET: This region is for comparing your final budget for year 5 with
your actual budget for year 5. You will need to use the model for a year or
two for this comparison to be useful. I use this region to see how well my
forecast did against the actual revenue per month.
R - FACTOR: From your online seession - you learned the r factor is
measure of validity. It ranges between -1 and +1. The closer the r value is
to this range the the stronger the predictability of the forecast. For r
values less than .5, try and compile as much additional information about
your upcoming budget as possible to help set that revenue estimate
better.
@correlation(revenue, years)
ADJUSTMENT FACTOR: I use this region to tweak each month's estimate
depending on the strength of the r factor, economic turns, or what ever
added information that will be helpful in getting at the best revenue
forecast - the best not the biggest.

THE CHARTS
MONTHLY: The model automatically builds a chart of each month's
history and inserts a trend line with the next period forecasted.
HISTORICAL: The model creates a chart representing the annual revenue
with a trend line depicting the forecast of the next period.