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How To Make Financial Projections It is impossible for anybody to make projections with 100% accuracy (if reported results are exactly in line with your projections, it will be more likely a case of extreme luck or contacts (a euphemism for insider knowledge)). Often people ask us, if such be the case, then why make projections at all? Projections serve a very important purpose. They give you a framework to analyze the company's operations in detail and thus understand reasons for deviations from the forecast. Projections, if made with care, at least give a good indication of trend. In other words, projections can at least let you know the broad direction of future financial performance, whether growth will be in the vicinity of 25-30% or 0-10% or -25%. This is of great relevance to the intelligent investor. The other question, is whether one can make projections sitting in air-conditioned comforts without...

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