Various studies show that increasing financial forecast accuracy will lead to higher profits, lower inventory levels and a higher share price.  By how much varies by industry, time period forecasted, forecast measure, business model and a myriad of other factors that all play into the financial forecast itself. 

With the speed of business constantly increasing, the ability to determine if financial forecast accuracy was due to better methods or external factors gets harder with every passing year. 

This course will cover the most common ways financial planning and analysis professionals can measure the accuracy of their financial forecasts.  Measures reviewed can be used at the corporate, division or product line level. 

 

 

 

Learning Objectives
  • Identify financial forecast control measures
  • Discover how to calculate mean absolute deviation (MAD for short) and Mean Absolute Percentage Deviation (MAPD)
  • Recognize 3 types of internal financial forecasts
  • Discover how to calculate cumulative error and average error

 

 

Last updated/reviewed: March 13, 2024
21 Reviews (68 ratings)

Reviews

5
Member's Profile
I really enjoyed the course. The only change I would make is looking at some other error measurements. MAD and MAPD are good for basic are we close type questions, but they aren't super helpful for comparing models or statistical forecasting.
3
Anonymous Author
I work in operations and was looking for a class to help with forecasting labor and expenses. I should have probably taken a more basic class. I was able to follow along and learned from this course just not what I thought it was...
4
Anonymous Author
This course provided a basic understanding about why forecasting is important. It provided some tools for analyzing the accuracy of forecasting and talked about how improving forecasting can improve both top and bottom lines.
3
Member's Profile
It is great for an overview of the forecasting process, but I am looking for a more detailed presentation on how to do the calculations and how to link cells to build the worksheets.
5
Anonymous Author
Excellent course. Everyone in FP&A should take this as it's finance measuring finance - something we don't do nearly often enough. This provides a useful framework and examples.
4
Member's Profile
Some really insightful thoughts on improving forecasting but could do with some practical examples to support the arguments and conclusions presented.
4
Member's Profile
Good basic class with good presentation and slides. The presenter made the class interesting. I recommend this class to those wanting a good overview.
4
Anonymous Author
Great takeaways, I would have liked to run through a couple more examples, or some service industry forecasting techniques, specific to the industry.
3
Anonymous Author
good content that could be delivered in a shorter time with more examples given but the presenters energy for the subject helped me stay engaged.
4
Anonymous Author
Good explanations on how to calculate forecast errors. The average error discussion was diverted to standard deviation, which made it confusing.
4
Anonymous Author
This has some great concepts, a little more practical use and how to manage forecast using the methods would make it more effective.
5
Anonymous Author
Overall a great course for a beginner and I enjoyed the explanations and points raised in this course.
Anonymous Author
Good example of how to measure forecast accuracy and how improving can improve bottom line.
4
Member's Profile
I was hoping for more examples of measuring forecast accuracy, but the content was useful.
4
Anonymous Author
Good overview. A 2nd course deeper case studies would be helpful.
5
Anonymous Author
Great review of the basics in industry - forecasting and such.
5
Member's Profile
Good intro to tools that can help improve forecasting.
5
Anonymous Author
interesting aspect of forecasting; practical lesson
4
Member's Profile
It's a great course. It makes you think.
4
Member's Profile
Simple and very clear.
5
Member's Profile
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Prerequisites
Course Complexity: Advanced

Prerequisite: Previous experience in finance

 

Advanced Preparation: None

 

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
  Course Overview CPE
Course Syllabus
INTRODUCTION AND OVERVIEW
  16:58PREVIEW: Introduction to Calculating Financial Forecast Accuracy
Calculations
  What is MAD and MAPD? How do I calculate Both? 6:11
  Calculate Cumulative Error and Average Error4:04
Control
  Setting Forecast Control Measures4:24
  Playing Your Financial Forecast Handicap 2:39
Conclusion
  Course Take-Aways6:35
SUPPORTING MATERIALS
  Slides: Calculating Financial Forecast AccuracyPDF
  Calculating Financial Forecast Accuracy Glossary/IndexPDF
REVIEW & TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam