[SOUND] Hi, good to see you again. In the last three videos, we discussed the approach to structured revenue budget. And we mentioned one of the major challenges in revenue budget, which is the forecasting. There are many definitions of forecasting, we include some of them in the reading materials. Basically, the idea of forecasting is to estimate the quantitative state of variables in the future with bases on historical data and estimation of trends. In our case, the variable is the revenue related to products, services, and contracts. Whenever we analyze the future state of a variable, we're dealing with uncertainty. The future is unpredictable. Let's make no mistakes. And yet, we must estimate revenues to support the budgeting process. Let's not forget, many other areas of the company rely on revenue budget. Let's look again the example we provided before with revenues byproduct lines. In the example, the sales forecasting unit shows an increase in units sold for all product lines. In the role of budgeting analyst we should talk to sales people, they can contribute in the estimation of how many units we forecast to sell. Keep in mind, though, that sales people may have some bias in the information due to the incentive system they are following. Anyway, they are a very good source of information to make the sales forecast more accurate. Note also a price increase in product 1, which includes every quarter, this could be due to an expected increase in the mix of raw materials that compose the product 1, or it might come from the strategic decision to reposition the product. For example, by adding more features to slowly move up the product towards a premium positioning. For product 2, we can see it has a price increasing at the second half of the year, and product 3 doesn't have any price increase. As we mentioned before, the example also includes a sales discount line for the products. They may be based on volume ranges or the consequence of a product substitution program to happen in the next year. Anyway, the message here is always look for the assumptions and try to understand them, you either use them as they are or might need to review them. Well, in a nutshell, what we've been discussing so far is about assessing assumptions to support forecasting. Some of the assumptions are under our control, most of them are not, and uncertainties come from those which are not. The strategy analysis process includes analyzing uncertainties, so there may be strategic guidelines to support revenue budgeting. For example, guidelines about economic growth, the level of competitive rivalry, technological evolution, and changes in societal patterns. Maybe you have participated in the strategy analysis, maybe you have not. What is important is revenue forecasting has a lot to do with strategy. Look for the strategic guidelines. You benefit from a good knowledge on strategic guidelines because the budget should follow them. Well, let's conclude revenue forecasting in the next video. See you soon. [SOUND]