Financial forecasting is a process of making predictions about future financial performance based on historical data and current conditions. This involves analyzing past financial data, market trends, and other factors to predict future revenues, expenses, profits, and cash flow. Financial forecasting plays a crucial role in corporate finance, investment analysis, and strategic planning, as it helps businesses to make informed decisions about budgeting, resource allocation, and investment opportunities. Various tools and methods, such as statistical models, ratio analysis, and scenario planning, are used in financial forecasting to create reliable and accurate projections.