ABSTRACT
Calculating the gap and deciding the task are extremely simple. All that is required is to compare the profit target with the profit forecast for each year, and by subtraction, calculate how great the difference is. Having determined the company's profit target and forecast the likely profits for each year the corporate planner calculates the gap. This gap represents the extra task facing the company over and above the mere continuation of the existing business - it indicates how much extra profit has to be yielded from the decisions and the commitments that will be made over the next few years. If the company were to aim to close the gap indicated by comparing the target and the forecast without taking account of the errors that will surely be associated with the forecast. It may run the risk not only of failing to achieve the target, but of failing to do so by an unacceptably wide margin.
