Financial Forecasting

Showing 1-6 of 6 results
FinanceIcon ChevronFinance Processes

Financial Forecasting When Modeling with Missing Data

by Sean Kae Siang Lim

A financial forecast is a map that leads investors to the end goal. Most forecasts fail because they assume the ability to capture a market without detailing the assumptions to get them there. Startup financial models must be granular, with no missing steps from points A to Z.

9 minute readContinue Reading
FinanceIcon ChevronProfitability & Efficiency

Forecast for Success — A Guide to Cash Management

by Paul Ainsworth

Running out of cash is one of the main reasons why startups fail. More established companies can also be affected. We outline the importance of managing cash, key metrics, and actions to improve performance.

9 minute readContinue Reading
FinanceIcon ChevronFinance Processes

Survival Metrics: Getting to Grips with the Startup Burn Rate

by Pierre Francois

Burn rate is one of the simplest, yet most fundamental metrics that investors and startups focus on. It pertains to the total cash spend of the business per month, which demonstrates both growth progress and potential runway that the business has to survive. This article introduces the burn rate concept and the tactics that can be applied to optimize it.

13 minute readContinue Reading
FinanceIcon ChevronFinance Processes

Forecaster’s Toolbox: How to Perform Monte Carlo Simulations

by Stefan Thelin

One of the most important and challenging aspects of forecasting is handling the uncertainty inherent in examining the future. Every CEO, CFO, board member, investor, or investment committee member brings their own experience and approach to financial projections and uncertainty, influenced by different incentives. Oftentimes, comparing actual outcomes against projections underscores the need to explicitly recognize uncertainty. Monte Carlo simulations are an extremely effective tool for handling risks and probabilities, used for everything from constructing DCF valuations, valuing call options in M&A, and discussing risks with lenders to seeking financing and guiding the allocation of VC funding for startups. This article provides a step-by-step tutorial on using Monte Carlo simulations in practice.

22 minute readContinue Reading
FinanceIcon ChevronRevenue & Growth

What Is Sales Forecasting

by Toptal Research

Forecasting sales is an activity often performed inaccurately, with growth figures either being anchored around a target of "inflation + x", or an unrealistic round number plucked from thin air. In this tutorial, we explain the process of sales forecasting and how a correct process can help businesses in other areas, beyond just setting top-line targets.

8 minute readContinue Reading
FinanceIcon ChevronFinance Processes

Why Every Business Should Build Weekly Cash Flow Forecasts

by Marty Mooney

When most finance professionals hear the term “13 week cash Forecast,” they view it as a burden—one more task to appease an overbearing lender. It doesn’t help that it seems less exciting than analyzing an investment or acquisition. Therefore, people often only prioritize these forecasts in distressed situations, when it is too late to take corrective actions. However, in this article, Toptal Finance Expert Marty Mooney argues that weekly cash forecasts are crucial for all businesses, irrespective of size, health, or sector. It also provides a simple tutorial for efficiently building such analyses.

18 minute readContinue Reading

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