Feel Free Read Forecasting Revenue and Expenses for Small Business: Using Statistical Analytics PDF
There's an old saying in business: “If you can measure it, you can manage it”. What's measurable is almost always presented in the form of statistics. Growing a business without the use of statistics is like having one hand tied behind your back in a fight. Many business managers complain that building forecasts with any degree of accuracy takes a lot of time. It is better spent selling rather than planning. But few financial institutions will put money in a business if it’s unable to provide a set of thoughtful forecasts. More important, proper financial forecasts will help develop operational and staffing plans that will create a more efficient business environment. Ongoing internal audits and forecasting trends using regular random sampling is key in measuring the pulse of business activity.Market analysis and operations research discussions can involve very complex procedures that may be beyond the reach of small business managers. With this book and software the complexity of properly sampling, conducting statistical analysis and documenting accounts is handled by Auditmetrics AI assisted software that is made available with the book. It prepares the business manager to conduct sophisticated analysis that is inexpensive and easy to use. The AI assistance starts with the manager to first decide on a margin of error and the software then guides the process through to the finish.Separate statistical software is not necessary. Excel offers a wide range of statistical functions which can be used to calculate a single value or an array of values in the Excel worksheet. The Excel Analysis Toolpak is an add-in that provides the statistical analytic tools that is used in this book. Microsoft Excel Professional and the Windows operating system are the only requirements.It has been our experience that most accountants and individuals that self-administer their business are generally well versed in Excel. Appendices are included to cover the basics of using MS Excel in selecting a stratified random sample and how to convert QuickBooks standard reports into an Excel data matrix that can be read in by Auditmetrics AI. The book is divided into two main sections:PART I – The Statistical Method - In this section is covered the statistical principles of analyzing empirically derived account data that is the underpinning of economic analysis. Two fundamental ideas are uncertainty and variation. Data is used to help explore and understand the dynamics of the business environment. What leads to that uncertainty is data variation that is inherent in financial data. In this section is covered the basic measurement of central tendency, variation and uncertainty such as the mean, standard deviation and probability. It is presented at a basic level for those who have minimal experience in statistics. For those who have taken courses in statistics, this will be a refresher that focuses on statistical methods used in economic analysis and market research.Part II – Forecasting Revenue and Expenses Using Regression – In this Section is a discussion of using one of the most powerful tools in forecasting future economic activity. It begins by covering the core principles of regression, starting with bivariate modeling and progressing to multiple and non-linear regression. The building and interpreting of regression output is accomplished by using MS Excel built-in functions. Though Excel can do all the regression calculations and outputs covered in this section, it is still important to review the underlying mechanics that is provided in Part I.
