Forecasting and reporting
Rolling forecasts
Replace budget months with actuals as they close, re-forecast the rest of the year, and keep a constant 12-month view ahead.
Learning objectives
- Explain how a rolling forecast differs from the annual budget
- Re-forecast the year as actual + forecast after months close
- Build a linked 12-month rolling forecast across Inputs, Actuals, Forecast and Summary tabs
The budget is fixed once approved, but the world moves on. By the end of March, Rawdah knows its first quarter grew more slowly than budgeted, and management wants two answers: where will FY2026 land? and what do the next twelve months look like? Rawdah Home Retail Co. is a fictional retailer; all figures are illustrative.
The first is the latest estimate (LE, also called the outlook or re-forecast): actual results for closed months plus a forecast for the rest of the year. The second is a rolling forecast: a forecast that always looks a fixed distance ahead (here 12 months), adding a new month at the end each time a month closes, so the horizon never shrinks to nothing as the year-end approaches.
LE(FY) = Σ Actual (closed months) + Σ Forecast (open months); Forecastₘ = Same month last year × (1 + g)
- Closed months
- months whose books are closed: actuals replace budget and forecast
- Same month last year
- the most recent actual for that calendar month: FY2025 for Apr–Dec 2026, but FY2026 actuals for Jan–Mar 2027
- g
- the current growth view, which can differ from the budget growth
Included with a Formula Quest membership
The rest of this lesson is for members. Members get the full lesson, including its 3 graded exercises, and every other Finance Quest lesson.