This method will not be taken up here, but an explanation of its use can be found in any introductory book on statistical methods. It must be reemphasized that a trend is determined from past data and from the total market as reflected in company sales. The investigator must give careful thought to how changing market factors will affect his forecast. Although he cannot have precise knowledge of these factors, he must decide how influential they are likely to be and adjust his forecast accordingly. The reliability of a forecast is always uncertain.
Past performance is no guarantee of the future.
The basic value in making a forecast is that it forces the buyer or seller to look at the future objectively. A forecast does not eliminate the need for value judgments, but it does require the forecaster to identify elements influencing the future. It may act as a damper on the buyers unbounded faith in his own managerial ability.