# Forecasting a Metric

## Why Forecasting?

Forecasting is the practice of using historical data and statistical models to predict future trends in metrics that are important to your business. You're benefited from the forecast in many ways:

* **Plan and budget effectively:** By forecasting future business metrics, you can plan and budget for future growth or downturns, and make informed decisions about investments, staffing, and other resources.
* **Identify potential risks and opportunities:** By monitoring trends in key metrics over time, you can identify potential risks and opportunities and take proactive steps to mitigate risks or capitalize on opportunities.
* **Improve operational efficiency**: By tracking metrics related to operational efficiency, you can identify areas for improvement and implement strategies to reduce costs and increase productivity.
* **Measure and evaluate performance:** By setting targets based on forecasted metrics, you can measure and evaluate your performance over time and make adjustments as needed to achieve your goals.

## Forecasting with Presight

By default, every metric in your company can be forecasted for a year period with Presight's default forecasting function.

{% hint style="warning" %} <mark style="color:orange;">Newly uploaded metrics might require upto 24 hours for its forecast to appear.</mark>
{% endhint %}

### Using our Advanced Forecasting Function - <mark style="color:blue;">AUTOFORECAST("AUTO")</mark>

{% hint style="info" %}
Auto-ARIMA (Autoregressive Integrated Moving Average) is a reliable and accurate forecasting method commonly used in business. It combines two key concepts, autoregression and moving average, to make predictions based on historical data patterns.

In simpler terms, ARIMA analyzes the relationship between past values and uses that information to predict future trends. It takes into account not only the current data point but also the previous values and their differences. By examining the patterns in the data and how they change over time, ARIMA can generate forecasts that are informed by historical patterns and capture important fluctuations. This makes it a valuable tool for businesses looking to make reliable predictions and decisions based on accurate forecasts.
{% endhint %}

When you **`Ctrl+double-click`** on a future segment of any metric, you can see our **`AUTOFORECAST("AUTO")`** formula in the prompt.&#x20;

<figure><img src="https://133649292-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FIYMCWeQmo9kVg5C6SOyv%2Fuploads%2FoH9ZRXAMcqK9NtJdR2ps%2Fimage.png?alt=media&#x26;token=7f63472e-0399-426a-895d-cf149c2c897d" alt=""><figcaption></figcaption></figure>

This forecast works only if you have more than 12 months worth of data, and isn't adjustable by design as it only takes into account the signals from your data.&#x20;

Presight currently offers two <mark style="color:blue;">**Forecast Formulas**</mark>: <mark style="color:purple;">**AUTOFORECAST**</mark> and <mark style="color:purple;">**GROWBY**</mark>. If you want to change to <mark style="color:purple;">**GROWBY**</mark>, you can delete AUTOFORECAST and option to choose <mark style="color:purple;">**GROWBY**</mark> will be in the prompt.

{% hint style="warning" %}
You can only edit Forecast Formulas of your own metrics!
{% endhint %}

<figure><img src="https://133649292-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FIYMCWeQmo9kVg5C6SOyv%2Fuploads%2FsVoMf7HiJUHZQMDwNnj0%2Fimage.png?alt=media&#x26;token=3a7f465c-e294-40b3-89c4-2eeda492169d" alt=""><figcaption></figcaption></figure>

<mark style="color:purple;">**GROWBY**</mark> allows you to forecast the growth of a metric at a fixed rate dictated by you, take a look at the second forecast option below.

### Forecasting Growth at a Fixed Rate - <mark style="color:blue;">GROWBY(\_%)</mark>

This forecasting function allows you to set a specific growth rate for the metric overtime. Input your growth value and Presight will compute the values as such.

<figure><img src="https://133649292-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FIYMCWeQmo9kVg5C6SOyv%2Fuploads%2F1BGuTG39CI0vNcTpDw4m%2FScreen%20Shot%202023-02-27%20at%205.16.17%20PM.png?alt=media&#x26;token=b76ea9a3-5554-40a4-9f97-20032f35ad95" alt=""><figcaption><p>Forecasting options on Presight 1.0</p></figcaption></figure>

{% hint style="warning" %}
Forecast function currently works independently in monthly time granularity and quarterly time granularity. Advanced forecasting with auto-reconciliation will be released in the next version.
{% endhint %}

## Updating your forecast

When you change a formula of a metric, you need to reload the forecast formula:

<figure><img src="https://133649292-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FIYMCWeQmo9kVg5C6SOyv%2Fuploads%2FIq2xje8KbvL332KdlKu3%2Fimage.png?alt=media&#x26;token=578e27db-b23e-4947-8d1b-26cbe91ff5e3" alt=""><figcaption></figcaption></figure>
