Forecasting refers to the method of predicting future events and trends by analyzing current and past data. In the context of financial and business settings, forecasts are typically used to estimate financial outcomes such as revenue, expenses, profit, or market growth.

For example, a company might use a forecast to predict their revenue for the next quarter, using historical sales data and trends as the basis for their projection. This allows the business to plan resources, budgets, and strategies effectively.

Forecasts can be created using a variety of methods ranging from simple trend analysis to more complex statistical and econometric models. In practice, businesses always account for uncertain factors in forecasts, which highlights the importance of regular updates and scenario analysis in the forecasting process.