What do forecasting methods aim to estimate?

Forecasting methods are primarily used to estimate future financial outcomes, which is essential for effective financial planning and management. These methods utilize historical data, market trends, and various analytical techniques to project what will likely happen in the future regarding revenue, expenses, and other key financial metrics. By focusing on future outcomes, organizations can make informed decisions about budgeting, resource allocation, and strategic planning to achieve their financial objectives.

While current market trends and customer behaviors can inform forecasting, they are not the primary aim of forecasting methods. Additionally, estimating historical financial performance is more about analyzing what has already occurred rather than predicting future events, which differentiates it from the goal of forecasting. Therefore, the correct choice emphasizes the forward-looking nature of financial forecasting.