Forecasting is the process of using past and current information to predict future events and making provision to face such challenges of future contingencies. In the words of Henry Fayol “The plan is the synthesis of various forecasts: annual long-term, short-term, special etc. It is a sort of picture of the future, where immediate events are shown clearly, the prospects or the future with less certainty”.
According to Louis A. Allen “forecasting is a systematic attempt to probe the future by inference from known facts. The purpose is to manage with information on which it can base planning decisions”.
Forecasting is that concerned with the calculation of probable events and it involves ‘looking ahead’ in order to predetermine the events and their financial implication of these events on the business organisation. Forecasting is the formal process of predicting future events that will significantly affect the functions of the enterprise.