Which technique is used to forecast budgetary needs based on historical data?

Trend projection is a technique that estimates future budgetary needs by analyzing historical data to identify patterns or trends over time. This method involves examining past financial data to predict future income and expenses, which helps organizations allocate resources effectively. By looking at historical trends, organizations can make informed decisions about future budget requirements and adjust their financial planning accordingly.

This approach is particularly useful because it allows for the consideration of seasonality, cyclical patterns, or other variations that may affect financial performance. It leverages existing data to create a more accurate forecast, which is crucial for effective budget planning and management. In summary, trend projection serves as a powerful tool for organizations seeking to anticipate their future financial needs based on established historical performance.