All language subtitles for 3 - Intro To Modeling - lang_en

Modeling refers to using certain inputs and using those inputs to

predict and forecast how our desired business metric will perform in the future.

How far out you forecast really depends on the type of company you have.

Startups usually forecast six months to a year out,

while most established companies forecast out a few years.

It can also depend on the metric,

for example, sales bookings,

maybe for a few months out.

Models are continuously updated on an ongoing basis,

monthly, quarterly, annually, depending on the metric.

Most businesses forecast the sales bookings and financial statements.

Typically, businesses forecast all three financial statements,

profit and loss statement,

cash flow statement, and balance sheet.

However, in this lesson,

we will focus on the profit and loss statement.

We have provided some website links that go over

how to forecast the other two financial statements,

as it requires more specialized knowledge of finance and accounting.

In the next video, we will go over two approaches to modeling,

top-down and bottom-up approach. See you in the next video.