Discuss why forecasting is important to an organization including a brief discussion of the six steps that an organization should follow when developing its forecasting model.

1. Discuss why forecasting is important to an organization including a brief discussion of the six steps that an organization should follow when developing its forecasting model. 2. What role does MAD play in evaluating a forecasting model? 3. List and describe at least two time series models giving an example of the type of business that might find each of the models you discuss beneficial. 4. Describe how you would develop a pro forma income statement (Table 6-7 in your textbook). 5. What role does the pro forma balance sheet play in financial forecasting? 6. Why is it important to have a budget to use as both a monitoring and control tool? 7. Moving Average Forecast—Using the data in the table below, calculate a three-month moving average forecast for month 12. Table. Actual Sales Data Time Period Actual Sales ($000) 1 445 2 478 3 525 4 660 5 570 6 600 7 632 8 648 9 690 10 725 11 750 12 8. Regression Forecast. Using the data in the table for questions #7 calculate the four items below. You may do this on your calculator or in Excel, however, please be sure to indicate the primary formula that you would use for each calculation. If you make your calculations in Excel be sure to export your work into Word before submitting your work to your mentor. a. What is the slope? b. What is the intercept? c. Write the regression equation. d. Calculate a regression forecast for month 25. 9. Using the following balance sheet, create a pro forma sheet using the percentage of sales method. Assume income next year is $50,000. Total Sales Current Year   $275,000 Percentage of Sales (%) Sales Next Year $350,000 Assets Current Assets Cash $5,694 Accounts Receivable 19,662 Inventory 3,381 Total Current Assets $28,737 Fixed Assets Furniture & Fixtures 5,595 Transportation Equipment 25,456 Total Fixed Assets $31,051 Total Assets $59,788 Liabilities and Owner’s Equity Current Liabilities Notes Payable $15,456 Accrued Taxes Payable 3,598 Total Current Liabilities $19,054 Long Term Debt 18,654 Total Liabilities $37,708 Owner’s Equity 22,080 Total Liabilities and Owner’s Equity $59,788 10. Using the results from your pro forma balance sheet in question 9 answer the following: a. How much did the owners take out of the business? b. What is the profit margin for next year?