Hello, I'm working on valuation of the target company our company is to buy. The target company is operating based on the order from the client. Can you help me forecast sales of the company?

Question

anonymous · Answer

Time series forecasting is commonly done by many analyst, but the core of this gets complicated. The assumption behind time series analysis is the underlying relationship between past values being able to predict the future value. Are you projecting quarterly sales or yearly?

anonymous · Answer

Many thanks. I'm projecting yearly sales by projects. I agree with you on the assumption that past values enable us to predict the future value. But, i think it's not proper to apply this assumption to valueing the company is operating based on the order from the client. The best case is that there's confirmed backlog for the projected period (5years). Unfortunately, I have only 1-year backlog.

anonymous · Answer

I see! Well, without being able to test the data it's hard to predict anything. The initial test for time series data starts with the test for stationarity. Why don't you create a file with all the data and let me take a look at it. That way I know exactly what your are dealing with and can possibly help. If the information is confidential change the headers and the numbers! I want to help but can't say much without understanding the whole issue.