Forecast Accuracy

Forecast Accuracy measures how close a financial forecast comes to predicting actual financial results. It’s like gauging the precision of your financial crystal ball. Ideally, forecasts should be as accurate as possible to ensure reliable planning. Deviations between forecasts and reality (forecast errors) are inevitable, but analyzing these discrepancies helps refine future forecasts and improve decision-making. Companies use metrics like Mean Absolute Error (MAE) to quantify forecast accuracy.