Framework

Rolling forecast cycle

The question it answers

When volatile costs, prices or exchange rates make the annual budget outdated, how should a CFO re-forecast each quarter and track monthly variances?

Origin
Hope and Fraser (2003) on beyond-budgeting; guidance revision seen in the Starbucks releases
Diagram type
Cycle
Level of analysis
Firm
Topics
Corporate financeData & analytics
Stack of clay coins beside a rising glass bar chart, icon for finance

Diagram

Rolling forecast cycle

  1. Annual budget as reference
  2. Quarterly re-forecast
  3. Monthly variance analysis (volume, price, mix, FX, timing)
  4. Year-end review of forecast accuracy

Sources

References

Listed A–Z by author surname, Harvard style. A source with a DOI links to https://doi.org/…; one without links to its page or says plainly that it has no DOI.

  1. Hope, J. and Fraser, R. (2003) Beyond Budgeting: How Managers Can Break Free from the Annual Performance Trap. Boston: Harvard Business School Press.No DOISource page
  2. Starbucks Corporation (2020) Business update (8 April). SEC EDGAR, Exhibit 99.1 (Press release).No DOIsec.govSource page
  3. Starbucks Corporation (2020) Starbucks reports Q4 fiscal 2020 results (29 October). SEC EDGAR, Exhibit 99.1 (Press release).No DOIsec.govSource page