Lesson 6 of 7 · All lessons in this module
- What to forecast: forecast objects and principles
- Forecast approaches and the forecast horizon
- Forecasting revenue: top-down, bottom-up and non-recurring items
- Forecasting operating costs: COGS, SG&A and segment margins
- Working capital, capital investments and capital structure
- Integrated case: fixed assets class by class and a marketplace cost base
- Scenario analysis: risk factors, cost structure and sensitivityVideo lesson
Lesson 6 of 7 · 16 min
Integrated case: fixed assets class by class and a marketplace cost base
Forecast each long-term asset class with its own driver and roll it forward from the opening balance, and forecast a marketplace's cost of revenue on the sales that carry the goods, not on total revenue or GMV.
In short
- Fixed assets split into PP&E, intangibles and goodwill; each has its own capex-to-revenue ratio and its own rate on the beginning balance.
- Roll-forward: ending = beginning + capex − depreciation (or amortisation). Goodwill is held flat unless an acquisition is planned.
- Choose each base year deliberately: a one-off acquisition year is not a normal level for intangibles capex.
- A marketplace's cost of revenue follows its own retail sales (recorded gross), not total revenue (which includes net-basis fees) or GMV.
- As fees grow faster than own sales, the gross margin rises with no change in retail margin; product mix also moves inventory turnover.
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