Projection

tl;drA financial forecast that reflects management's hypothetical assumptions about future events and actions.

Projections differ from forecasts by incorporating what-if scenarios and hypothetical conditions, helping organizations plan for various possible futures.

Consider a technology company that develops three distinct revenue scenarios: a base case anticipating 20% growth, an optimistic case projecting 40% growth contingent on successful product launches, and a conservative case projecting 10% growth assuming market contraction. Each scenario encompasses detailed assumptions regarding expenses, workforce requirements, and capital expenditures.

Developing projections requires balancing analytical rigor with informed judgment. Organizations must document assumptions while maintaining reasonable expectations.

Back to the glossary