Financial Forecasting Project

Overview

This project is a continuation of my previous accounting flow project.

After building the accounting cycle from journal entries, general ledger, trial balance, and adjustment entries, I tried to continue the process into simple financial planning and forecasting.

The goal of this project is not to create a perfect corporate financial model, but to understand how historical accounting data can be transformed into forecasting, budgeting, and scenario analysis.

This project focuses on:

• Revenue forecasting
• Gross profit projection
• Scenario analysis
• Operating profit estimation
• Fixed vs variable expense behavior
• Simple budgeting approach using historical trends

What I Did

Using historical monthly accounting data from 2024–2025, I created:

• Base Case Forecast
• Best Case Forecast
• Worst Case Forecast

The forecasting process combines:

• Historical trend forecasting using Excel
• Gross margin approach
• Revenue growth assumptions
• Expense behavior interpretation
• Simple scenario adjustments

Forecasting Logic

Revenue Forecast

Revenue was forecasted using historical monthly trends and Excel forecasting formulas.

Then several scenarios were created:

• Base Case → normal projected growth
• Best Case → higher revenue growth assumption
• Worst Case → slower growth assumption

Cost of Goods Sold (COGS)

At first, I realized something important: Revenue and COGS cannot be separated. If revenue increases, COGS should also increase. Because of that, I stopped using evenue up + COGS down and replaced it with a more realistic approach using Gross Profit Margin (GPM).

Historical margins were used as the base assumption to estimate future COGS behavior.

Operating Expenses

This project also separates:

Variable Components

• Revenue
• COGS
• Gross Profit

Fixed Components

• Depreciation Expense
• Salaries & Wages
• Employer FICA Expense

Some expenses were treated as relatively stable because operationally they are less affected by short-term sales fluctuations.

Dashboard Preview

The dashboard includes:

• Revenue trend
• Forecast scenarios
• Historical comparison
• Operating profit movement
• Trend line visualization

Key Learning

One thing I learned from this project:

Building the forecast itself is not the hardest part.

The difficult part is:

• making assumptions consistent,
• understanding relationships between accounts,
• and making the model still make sense operationally.

For example:

• Revenue affects COGS
• Margin assumptions affect profitability
• Fixed expenses behave differently from variable expenses

This project helped me understand that forecasting is not only about formulas, but also about business logic.

Tools Used

• Microsoft Excel
• Pivot Table
• SUMIFS
• FORECAST.ETS
• Scenario Analysis
• Basic Financial Modeling

Project Status

Completed as a learning and portfolio project.

Possible future improvements:

• Quarterly forecasting
• Cash flow forecasting
• Balance sheet projection
• More detailed budgeting model
• Power BI interactive dashboard

Data Source

https://github.com/Zain-just-Zain/Accounting-Flow-Project

Author

Zain_just_Zain