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An accurate forecast is based on accurate information, such customer information (spending habits), analyst projections from other companies, comparative studies of the broader industry, and even things like the price of oil, which may have a large bearing on profit margins. For instance, as the price of oil increases, everything goes up in price.
Based on this information, companies need to make wise decisions of what to do. They may want to offer special incentives to increase sales. They may want to offer other incentives like free shipping, when the price of oil is down. Or they may want to do something like expand by buying another company or keep more cash reserves on hand to weather some hard times, which may come. In short, accurate information is central to the future direction of any company.
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