Sales Forecasting, Sales, Revenue, and Cost Summary

A collection of flashcards summarizing key concepts related to sales forecasting, sales, revenue, and cost in business.

What is sales forecasting?

Sales forecasting is the process of predicting future sales based on historical data, market trends, and other influencing factors.

Why is sales forecasting important for businesses?

It helps businesses anticipate demand, plan resources, and set goals, driving strategic decisions, improving inventory management, and ensuring financial stability.

What are the two key types of sales forecasting?

Qualitative Forecasting and Quantitative Forecasting.

Define qualitative forecasting.

Qualitative forecasting relies on expert judgment, opinions, and market insights, such as surveys and focus groups.

Define quantitative forecasting.

Quantitative forecasting uses historical data and mathematical models to predict future sales, such as time-series analysis and regression models.

What is meant by sales in a business context?

Sales refer to the total volume of goods or services a company sells over a specific period.

How is revenue calculated?

Revenue is calculated as the price of goods or services sold multiplied by the quantity sold.

What is the difference between revenue and profit?

Revenue is the total income from sales, while profit is what's left after deducting costs from revenue.

What are fixed costs?

Fixed costs are expenses that do not change with the level of sales or production, such as rent and salaries.

What are variable costs?

Variable costs fluctuate depending on the level of production or sales, such as raw materials and shipping.

Why is understanding the relationship between sales, revenue, and cost important?

It is vital for determining profitability, calculating profit margins, and making strategic decisions regarding pricing and cost control.