What is commonly used to assess the effectiveness of a financial forecast?

Using actual financial performance over time is a primary method for assessing the effectiveness of a financial forecast. Forecasts are predictions based on historical data and market trends, and they provide a benchmark against which actual outcomes can be compared. By analyzing how closely actual results align with the predictions made in the forecast, businesses can evaluate the accuracy of their financial planning. This comparison helps organizations identify patterns, understand variances, and improve future forecasting methods.

In contrast, the other options, while they may provide useful insights, do not directly assess the effectiveness of a financial forecast. The number of products sold and total investment made can influence financial performance but do not serve as comprehensive indicators of forecast accuracy. Similarly, overall market share growth can reflect broader market dynamics but is not a direct measure of how well a specific financial forecast performed. Therefore, actual financial performance stands out as the most relevant method to evaluate the reliability and effectiveness of financial projections.