Sales Forecasting Practices of Large U.S. Industrial Firms

* Sales forecasting is a crucial part of many financial management activities, including profit planning, capital expenditure analysis, capital structure planning, cash budgeting and merger analysis. In all of these and other financial management areas, accurate sales projections are extremely important. Because of this importance, any prescriptive finance theory should be cognizant of and influenced by the projection and forecasting practices of the firms we prescribe for. Very little is known today about sales forecasting practices in industry, however, and a systematic cataloguing of current sales forecasting practices would assist in documenting and comparing current practices. The purpose of this study is to present some evidence regarding the current state of the art of business sales forecasting practices. Because of the nature of the topic, we necessarily use data from a questionnaire. In the following sections we present this questionnaire, the nature of the data obtained from it and draw some conclusions about the evidence. Data