What is necessary for accurate forecasting of numbers in business?

Accurate forecasting in business relies heavily on the use of historical data. Historical data provides a foundation for understanding past trends and patterns, which can be invaluable in making informed predictions about future performance. By analyzing past sales figures, market behavior, and economic conditions, businesses can identify trends and fluctuations that may continue in the future.

Assumptions are often built upon the analysis of historical data, but they do not replace the need for actual data. While expert opinions can add qualitative insights, they must be supported by quantitative data for forecasts to hold weight. Random estimates lack a structured approach based on evidence, weakening their reliability.

Thus, historical data is essential in crafting accurate forecasts, as it offers concrete insights drawn from real-world operations and outcomes, leading to more reliable predictions and decision-making in business.