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A projection of a company's financial health for a certain period of time, such as a year. A forward-looking statement makes certain assumptions; for example, management may assume that sales will increase or decrease by a certain amount based on current trends. As a result, forward-looking statements are subject to revision, as reality may not match the assumptions. A forward-looking statement is nonetheless useful for making certain decisions about a company's future, such as whether or not to expand operations.
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A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Discussions of these statements typically include words such as estimate, anticipate, project, and believe.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.