Sales forecast
Sales forecast: a prediction of future sales built from market and trend data, distinct from the sales budget, which is the committed plan for revenue and volume derived from it.
See it move
A skincare retailer's prior year sales were €480,000. Applying 5% expected market growth gives a sales forecast of €504,000, purely an estimate of demand. Management then adds an expected €26,000 from a planned advertising campaign, adopting a sales budget of €530,000. The forecast is the market's estimate; the budget is the plan management actually commits to.
The formula
Variables
- Sales forecast for the coming period (€)
- Actual sales in the prior period (€)
- Expected growth rate (decimal)
A simple trend-based sales forecast: projects next period's sales from the prior period's actual sales and an expected growth rate.
Check yourself
A stationery wholesaler recorded sales of €360,000 last year. Its market analysts project the underlying market will grow by 4% this year. What is the sales forecast for this year, using only the projected growth rate?