The Best Method For Calculating Earnings Forecasts

Anyone in the business world knows the importance of earnings forecasts. Indeed, it’s these forecasts that are used to make the financial investments that can make or break a company. Alas, it hasn’t always been the most reliable of tasks, and that’s why the process of coming up with these forecasts is always developing. 

In recent years, it has been crowdsourcing that has been used to create these forecasts. The rise of technology has made these possible, and they’ve been shown to create forecasts that are more reliable than older models. So what is crowdsourcing, exactly? It’s a term that is used in many different professions and forms, but broadly speaking, it’s a system of obtaining information from large numbers of people. Because it uses information from a large group, it can be better than relying on the system of smaller sources. 

Companies have adopted this type of forecasting model because it gives them an advantage over companies that do not use the model, and can be used for a variety of accounting tasks. It can have an effect on things such as investment timing and stock prices, and also helps to make forecasting more equal and diverse, since it takes the task out of the hands of the traditional companies. In other words, there’s a lot of value in this model. 

To learn more about this forecasting trend, take a look at the infographic below, which is based on research conducted by professors at the University of Alabama at Birmingham Collat School of Business.

Infographic Designed By: University of Alabama at Birmingham Collat School of Business accounting infographic