Glossary
Forecast variance
Forecast variance is the gap between forecast and actual revenue for a period, tracked over time and by the person or method behind the forecast.
Formula: (actual revenue − forecast revenue) ÷ forecast revenue.
Why it matters
A board trusts a forecast according to its past variance, not its confidence.
How Limerine uses the term
We measure a company's historical variance before proposing any change to how it forecasts.
Related area of work: Forecast, capacity, and board.
How to cite this definition
Limerine. "Forecast variance." Limerine Glossary, 2026. https://limerine.com/glossary/forecast-variance