In Oracle Fusion, specifically within the Enterprise Performance Management (EPM) and Enterprise Planning and Budgeting Cloud Service (EPBCS), the Financials Trend Method is a robust approach for forecasting and planning. It allows organizations to predict future financial outcomes based on historical data trends.
Overview:
- Purpose: The Financials Trend Method is utilized to automate projections for income statements, balance sheets, and cash flow items. This method is particularly useful for businesses aiming to forecast performance based on consistent historical patterns.
- Functionality: Users can input historical financial data and configure the system to project future values. Oracle Fusion uses statistical and data analysis techniques to identify trends and extend those patterns into future periods.
- Customization: The system allows customization of parameters, such as the trend period length and the type of data smoothing applied. This flexibility ensures that the method can be tailored to fit different forecasting needs and business cycles.
Key Benefits:
- Time Efficiency: Automates large parts of the forecasting process, reducing manual work.
- Data-Driven Insights: Leverages historical data for more accurate and reliable forecasts.
- User-Friendly Interface: Oracle Fusion’s interface helps users manage configurations and view forecast results easily.
Steps in Using the Financials Trend Method:
- Data Collection: Input historical data into the financial module.
- Parameter Configuration: Select the desired historical period and configure the trend settings (e.g., linear, exponential).
- Model Execution: Run the forecast model to project future financial outcomes.
- Analysis and Adjustment: Review the projections and make any necessary adjustments for anomalies or external factors not accounted for by historical data alone.
Applications:
- Budgeting and Planning: Facilitates long-term budget planning by projecting revenues, expenses, and other financial metrics.
- Financial Strategy: Helps CFOs and finance teams develop strategic financial plans based on expected trends.
- Performance Monitoring: Assists in tracking how current performance aligns with forecasted trends.
Overall, using the Financials Trend Method within Oracle Fusion EPM and EPBCS streamlines the forecasting process, supports data-driven decision-making, and enhances the strategic financial management of an organization.
| Trends | Description |
|---|---|
| Current Year Actual Average | Calculates the average for an account for the current fiscal year specified in Planning and Forecast Preparation |
| Current Period Actual | Takes the value for an account for the month or week specified as the Current Period for the Current Fiscal Year specified in Planning and Forecast Preparation. |
| Hold Forecast to Current Year Plan | For the Forecast Scenario only, compares how much has been spent year to date for an account to the Plan for the current year, and spreads the remainder evenly over the remaining months in the Forecast. |
| Prior Year Actual Average | Calculates the average for an account for the year prior to the Current Fiscal Year specified in Planning and Forecast Preparation. |
| Prior Year Actual with Seasonality | Takes the value for accounts for the month using the value for the same month in the prior year. |
| Forecast Average | For the Plan Scenario only, takes the average for the Forecast from the prior year. |
| Forecast with Seasonality | For the Plan Scenario only, takes the monthly values from the Forecast from the prior year. |
| Year over Year Increase/Decrease | Applies a percent (%) increase or decrease to the prior year’s value. |
| Clear Trend | Removes the trend and clears the data from a previously set trend. |
| Monthly Growth | Calculates year over year change for an account using current year and prior year as the basis to calculate the growth. |
| Prior Month Run Rate | Takes the value of the prior period. |