Summary Pearson Edexcel AS/A-Level Business Unit 2 - Managing Business Activities - 2.2 Financial Planning

2.2 – Financial Planning


2.2.1 – Sales Forecastng
Sales forecast The process of predictin future sales volumes aid values
Coisumer treids Chaines ii the buyiin habits of coisumers
Ecoiomic variables Fluctuatois ii factors outside of the busiiess’ coitrol that afect
the state of the ecoiomy aid therefore busiiess aid coisumer
behaviours

Possible approaches:
 Extrapolatoi of treids form past sales data
 Market research iicludiin test markets
 Moviin averanes
 Aialysis of ecoiomic variables

Why forecast sales?
 Fiiaice
o Iiform cash-flow forecasts
o Predict sales volume aid reveiue
o Assess ability to break-evei
o Helps set budnets
 Marketin
o Ideitfies whei promotoial actvity is ieeded
o Plai distributoi
 People
o Plai workforce ieeds for:
 Sales team
 Seasoial staf ii stores aid distributoi
 Peak tmes
 Operatve to eisure supply meets demaid
 Resource maianemeit
o Required level of output
o Stock maianemeit
o Cai supplier match demaid?

Factors afectin sales forecasts iiclude:
 Coisumer treids
o Goods comiin ii aid out of fashioi
o Shoppiin habits
o Demonraphic
 Chaines to the ecoiomy
o Iiterest rates
o Employmeit
o Stane oi the ecoiomy cycle
 Actois of compettors
o Compettors eiteriin aid exitin the market
o Chaines ii price aid promotoi