The CFO asks you to forecast next quarter revenue. How do you approach it, and how do you communicate uncertainty?

What the interviewer wants to hear

• Clarifies purpose, granularity and horizon
• Explores trend, seasonality and one-off events in history
• Starts with simple baselines before complex models
• Validates with backtesting on past periods
• Gives a range or scenarios, not one number, and states assumptions

Model answer

I start by asking what the forecast is for: budgeting, hiring or investor guidance changes how precise and how detailed it must be. Then I study at least two to three years of history, looking at trend, weekly and yearly seasonality, holidays such as Ramadan and Eid, and one-off events like a big contract that should be removed or modelled separately. I build simple baselines first, such as last year same quarter times recent growth, then try a time-series model like exponential smoothing if it adds value. I backtest by pretending it is an earlier date and forecasting a quarter I already know, to measure the typical error. I present a central estimate with a range, for example 12.4M with 80% likely between 11.6M and 13.1M, plus scenarios tied to key assumptions like the new store opening on time. I update it monthly as actuals arrive.

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