Financial Forecast
Projection of future financial performance.
Real World
When Airbnb prepared for its 2020 IPO, its financial forecasts had to be dramatically revised after COVID-19 collapsed bookings by 80% overnight — demonstrating how external shocks can render even well-constructed forecasts unreliable.
Exam Focus
Always evaluate a financial forecast by questioning the reliability of its assumptions, not just whether the numbers look realistic.
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