Predict. Do not extrapolate.

China Evergrande 2019 Results – Reverse Analysis and Forecasts

Content: Financing and operating implications – Much higher debt borrowing and raw inventory buying than 2018 – Modest after-sale at zero margin – What has not changed Projections if the company would maintain the 2019 conditions – New conditions in 2019 – Main UNchanged conditions – Projection results summary

Why cannot financial analysts alone raise the power of their forecasting model to the next level, yet?

Making a financial model more predictive than extrapolative is conceptually simple – model more the causes than the results. However, it is much more difficult than to conceptualize, in fact far outside the trained skill set of most financial analysts without a powerful tool, to simulate the actions of a company that produce the financial…
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Challenges in financial forecasting for credit and equity analysts

What makes a financial model more predictive than descriptive? When a model’s inputs are related more to the causes than to the results of the process being modeled, the model is more predictive and less descriptive than otherwise. Challenges facing credit and equity analysts With the currently available financial modelling tools, analysts often have to…
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