Forecast assumptions
A forecast is only as useful as the assumptions a reader can understand and challenge.
Separate inputs
Keep assumptions separate from calculations. State the basis for volumes, pricing, collection periods and costs. When inputs are embedded inside formulas, a reviewer cannot easily see what changed between versions.
Show alternatives
Choose plausible ranges rather than only a preferred case. Explain how changes in a few important variables affect cash and capacity. Sensitivity analysis should clarify uncertainty, not create a misleading appearance of accuracy.
Revisit the basis
Compare actual experience with the assumptions at a regular interval. Investigate differences before updating the model. A forecast should become a better decision tool over time, not simply roll the same assumptions into another period.