Financial forecasting is the process of estimating future financial outcomes based on historical data and analysis. It helps businesses and investors make informed decisions by predicting revenues, expenses, and cash flows. Techniques such as time series analysis and regression analysis are commonly used to create these forecasts. Accurate financial forecasting is crucial for effective budgeting and strategic planning. By understanding potential future scenarios, organizations can allocate resources more efficiently and mitigate risks. Tools like financial models and forecasting software enhance the accuracy of these predictions, enabling better financial management and growth strategies.