FORMULA CARD
Build a transparent forecast
Forecast only the drivers named in the Project Assignment Brief
Core formulas
| Measure | Formula | What it tells you | Common error |
|---|---|---|---|
| Forecast revenue | Prior revenue × (1 + growth) | Revenue implied by the growth assumption | Hardcoding the output instead of the driver |
| Forecast EBIT | Forecast revenue × EBIT margin | Operating profit implied by revenue and margin | Assuming margin expansion without an operating reason |
| NOPAT | EBIT × (1 - tax rate) | After-tax operating profit | Using the statutory rate without explanation |
| Forecast FCF | NOPAT + D&A - Capex - Change in NWC | Cash flow available before financing | Mixing signs for Capex and working capital |
Driver test
- Growth must link to volume, price, market or segment evidence.
- Margins must link to mix, costs or operating leverage.
- Cash-flow assumptions must remain consistent with the business model.