Final answer:
The starting point in financial forecasting is typically revenue, as it helps establish a baseline for projecting a company's future performance.
Step-by-step explanation:
The starting point in financial forecasting typically involves understanding a company's revenue. Revenue is the income generated from normal business operations and is a crucial starting point for financial forecasting because it sets the baseline for projecting future financial performance. From there, financial forecasters consider other factors such as expenses, net income, and cash flow to create a comprehensive financial forecast. A careful assessment of revenues and expenses helps ensure that enough money is coming in to cover these costs, which is essential for making informed budgeting decisions. Furthermore, firms need to consider their revenue to make decisions about financing options, such as attracting early-stage investors, reinvesting profits, borrowing, or selling stock.