In order to calculate the expected values, we apply statistical techniques to the company's historical data. If there are only two periods of historical data, we perform a simple trend analysis.
Example:
Using historical values for sales from 2018 and 2019, what is the predicted value for sales in 2020?12/31/2020 12/31/2019 12/31/2018 Sales $8 $5 $3
The trend analysis is as follows:
Expected % Change = ($5 - $3) / $3 = 66.66%
Expected 2005 Sales = $5 * 1.66 = $8.3
If there are three or more periods of historical data, we use either Simple Exponential Smoothing or the adjusted Holt-Winters Exponential Smoothing model to calculate the expected values. For more information about each algorithm, please see the prediction algorithms section. The following table lists each Analytical Procedures account with its corresponding method of prediction:
| Account | Prediction Algorithm |
| Sales | Adjusted Holt-Winters Exponential Smoothing |
| Cost of Sales | Calculated |
| Gross Profits | Calculated |
| Gross Profit Margin | Exponential Smoothing |
| Depreciation Percent | Adjusted Holt-Winters Exponential Smoothing |
| Depreciation | Calculated |
| Amortization Percent | Adjusted Holt-Winters Exponential Smoothing |
| Amortization | Calculated |
| Other Overhead or S,G,&A Expense | Adjusted Holt-Winters Exponential Smoothing |
| Other Operating Income | Adjusted Holt-Winters Exponential Smoothing |
| Other Operating Expenses | Adjusted Holt-Winters Exponential Smoothing |
| Operating Profit | Calculated |
| Interest Percent | Adjusted Holt-Winters Exponential Smoothing |
| Interest Expense | Calculated |
| Other Income | Adjusted Holt-Winters Exponential Smoothing |
| Other Expenses | Adjusted Holt-Winters Exponential Smoothing |
| Net Profit before Taxes | Calculated |
| Adjusted Owner's Compensation | Most recent historical value |
| Adjusted Net Profit before Taxes | Calculated |
| Net Profit Margin | Calculated |
| EBITDA | Calculated |
| Extraordinary Gain | Adjusted Holt-Winters Exponential Smoothing |
| Extraordinary Loss | Adjusted Holt-Winters Exponential Smoothing |
| Taxes Paid | Calculated |
| Net Income | Calculated |
| Cash | Calculated |
| Accounts Receivable | Calculated |
| Accounts Receivable Days | Adjusted Holt-Winters Exponential Smoothing |
| Inventory | Calculated |
| Inventory Days | Adjusted Holt-Winters Exponential Smoothing |
| Other Current Assets | Adjusted Holt-Winters Exponential Smoothing |
| Total Current Assets | Calculated |
| Gross Fixed Assets | Adjusted Holt-Winters Exponential Smoothing |
| Accumulated Depreciation | Calculated |
| Net Fixed Assets | Calculated |
| Gross Intangible Assets | Adjusted Holt-Winters Exponential Smoothing |
| Accumulated Amortization | Calculated |
| Net Intangible Assets | Calculated |
| Other Assets | Adjusted Holt-Winters Exponential Smoothing |
| Total Assets | Calculated |
| Accounts Payable | Calculated |
| Accounts Payable Days | Adjusted Holt-Winters Exponential Smoothing |
| Short Term Debt | Adjusted Holt-Winters Exponential Smoothing |
| Current Portion of Long Term Debt | Adjusted Holt-Winters Exponential Smoothing |
| Other Current Liabilities | Adjusted Holt-Winters Exponential Smoothing |
| Total Current Liabilities | Calculated |
| Notes Payable / Senior Debt | Calculated |
| Notes Payable / Subordinated Debt | Calculated |
| Other Long Term Liabilities | Calculated |
| Long Term Liabilities | Calculated |
| Total Liabilities | Calculated |
| Preferred Stock | Calculated |
| Common Stock | Calculated |
| Additional Paid-in Capital | Calculated |
| Other Stock / Equity | Calculated |
| Ending Retained Earnings | Calculated |
| Total Equity | Calculated |
| Number of Employees | Adjusted Holt-Winters Exponential Smoothing |
| Z-Score | Calculated |
Analytical Procedures for Nonprofits |
|
| Program Service Revenue | Adjusted Holt-Winters Exponential Smoothing |
| Contributions | Adjusted Holt-Winters Exponential Smoothing |
| Government Grants | Adjusted Holt-Winters Exponential Smoothing |
| Investment Revenue | Adjusted Holt-Winters Exponential Smoothing |
| Other Operating Income | Adjusted Holt-Winters Exponential Smoothing |
| Membership Dues | Adjusted Holt-Winters Exponential Smoothing |
| Net Assets Released From Restrictions | Adjusted Holt-Winters Exponential Smoothing |
| Total Unrestricted Revenue | Direct Calculation: Sum of Expected Unrestricted Revenue Accounts |
| Program Service Expenses | Direct Calculation: Total Unrestricted Revenue Expected * (1 - Gross Program Margin Expected) |
| Gross Yield | Direct Calculation: Total Unrestricted Revenue Expected - Program Service Expenses Expected |
| Gross Program Margin | Exponential Smoothing |
| Fundraising Expenses | Adjusted Holt-Winters Exponential Smoothing |
| Administration Expenses | Adjusted Holt-Winters Exponential Smoothing |
| Other Operating Expenses | Adjusted Holt-Winters Exponential Smoothing |
| Total Operating Expenses | Direct Calculation: Sum of Expenses Expected |
| Operating Yield | Direct Calculation: Gross Yield Expected - Total Operating Expenses Expected |
| Operating Margin | Direct Calculation: Operating Yield Expected / Total Unrestricted Revenue Expected |
| Other Inflows | Adjusted Holt-Winters Exponential Smoothing |
| Other Outflows | Adjusted Holt-Winters Exponential Smoothing |
| Total Change in Net Assets | Direct Calculation: Operating Yield Expected + Other Inflows Expected - Other Outflows Expected |
| Total Cash & Cash Equivalents | Direct Calculation: Prior Period Cash + Total Change in Net Assets Expected - Change in Total Receivables Expected - Change in Inventory Expected - Change in Other Current Assets Expected - Change in Investment Assets Expected - Change in Other Assets Expected - Change in Net Fixed Assets Expected + Change in Payables Expected + Change in Other Current Liabilities Expected + Change in Total Long Term Liabilities Expected |
| Restricted Cash | Percent of Total Cash and Cash Equivalents |
| Unrestricted Cash | Percent of Total Cash and Cash Equivalents |
| Total Receivables | Direct Calculation: Sum of Receivable Sub Accounts |
| Other Receivables | (Other Receivables Days Expected * Total Unrestricted Revenue Expected * Annualization Factor) / 365 |
| Contributions Receivable | (Contributions Receivable Days Expected * Total Unrestricted Revenue Expected * Annualization Factor) / 365 |
| Accounts Receivable | Direct Calculation: (Accounts receivable Days Expected * Total Unrestricted Revenue Expected * Annualization Factor) / 365 |
| Receivable Days | Adjusted Holt-Winters Exponential Smoothing |
| Inventory | (Inventory Days Expected * Total Unrestricted Revenue Expected * Annualization Factor) / 365 |
| Inventory Days | Adjusted Holt-Winters Exponential Smoothing |
| Other Current Assets | Adjusted Holt-Winters Exponential Smoothing |
| Total Current Assets | Direct Calculation: Sum of Current Asset Accounts Expected |
| Gross Fixed Assets | Adjusted Holt-Winters Exponential Smoothing |
| Accumulated Depreciation | Direct Calculation: Prior Period Accumulated Depreciation + Total Depreciation Expected |
| Net Fixed Assets | Direct Calculation |
| Long Term Investment Assets | Adjusted Holt-Winters Exponential Smoothing |
| Other Assets | Adjusted Holt-Winters Exponential Smoothing |
| Total Assets | Direct Calculation |
| Payables | Direct Calculation: (Payable Days Expected * Total Unrestricted Revenue Expected * Annualization Factor) / 365 |
| Accounts Payable | Direct Calculation: (Accounts Payable Days Expected * Total Unrestricted Revenue Expected * Annualization Factor) / 365 |
| Payable Days | Adjusted Holt-Winters Exponential Smoothing |
| Short Term Debt | Adjusted Holt-Winters Exponential Smoothing |
| Current Portion of Long Term Debt | Adjusted Holt-Winters Exponential Smoothing |
| Other Current Liabilities | Adjusted Holt-Winters Exponential Smoothing |
| Total Current Liabilities | Direct Calculation |
| Total Long Term Liabilities | Direct Calculation: Prior Period Total Long Term Liabilities + Change in Gross Fixed Assets + Change in Investment Assets + Change in Other Assets |
| Total Liabilities | Direct Calculation: Total Current Liabilities Expected + Total Long Term Liabilities Expected |
| Total Net Assets | Direct Calculation: Total Assets Expected - Total Liabilities Expected |
| Number of Employees (FTE) | Adjusted Holt-Winters Exponential Smoothing |