ABSTRACT
The financial records of a business contain all the data describing its history and its progress. In short, the records show how the business works. It follows, therefore, that the construction of a model from the firm’s financial history provides a platform for building a set of forecasts outlining that firm’s future.
A business employs labour and capital to produce goods and services. It buys materials, energy and a range of services to make its products. It adds value to those purchases via its labour force and capital in making the things it sells. The difference between the firm’s sales revenue and what it buys to produce those sales is added value.
