To demonstrate how to forecast revenue for a pharmaceutical company, we're going to use Ro VA Spanish pharmaceutical company who produces their financial statements in thousands of euros.

So all the numbers we're gonna see here are not in millions, but rather in thousands of euros.

In looking at the income statement, the first thing you might notice is that there are no historic data points for revenue.

This is because revenue needs to be forecast on a product by product basis.

So we have all of this information contained within the revenue tab itself.

Within the revenue tab, we can see some assumptions in the top bar, but if we go a bit further down, we'll be able to see the historic revenue figures on a line by line basis on a product by product basis.

As we can see from the historic revenue figures, not every product changes on a similar basis.

Some products such as High B, Roy's largest product have experienced sales that grow on a fairly consistent basis within Spain, but on a slightly more uneven basis with regards to their international sales.

If we look further down, Inox Parin biosimilar is a relatively new product which has experienced substantial growth from first being introduced in 2017.

However, the products of Vitorin, absol and a Vortex Tez all a similar product, just different brand names, have experienced stagnation in their growth rate and even decline over the last two years as those products reach the end of their patent period.

And Roe V starts to lose market share to generic products.

Other products such as Coor, ROE V, is no longer selling and no longer generating any revenue from.

So we need to get the historic data into our income statement.

So we need to calculate subtotal for high BR, and then with the subtotal for high B, we can then go on to calculate the total revenue for all pharmaceutical products.

R not only produces prescription based pharmaceutical products, but also produces contrast agents for various hospital procedures and other non-pharmaceutical products.

So we can add those on to get our total sale of goods for RO V.

And finally, RO V also makes revenue from sale of services.

The toll manufacturing here is where Ro v's. Production facilities are being used by other pharmaceutical companies to manufacture their drugs for which RO V generates an extra income stream.

If we add up all of the revenue streams that RO V has, we can then get the totals for the historic revenues carried over to the first forecast year, which we can then go back to the income statement and pick up that historic figure for 2015 from the revenues tab.

And once we've got the 2015 year in, we can copy this across to the right so that in the income statement, we are pulling the value for total revenues in from that revenue tab into our income statement.