Extrapolation: Difference between revisions
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imported>Doug Williamson (Links ordering.) |
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== See also == | == See also == | ||
* [[Approximation]] | * [[Approximation]] | ||
* [[CAGR]] | |||
* [[Interpolation]] | * [[Interpolation]] | ||
* [[MoM]] | * [[MoM]] | ||
* [[YOY]] | * [[YOY]] | ||
Revision as of 13:19, 14 January 2021
1.
A straight-line estimation method, where the estimated result lies beyond the range spanned by two or more known data points.
2.
More generally, any estimation method where the estimated result lies beyond the range spanned by known data points.
(Not necessarily using straight-line methods of estimation.)
Extrapolation is generally less reliable than interpolation.
Extrapolation can be particularly unreliable when historical trends - for example historical growth rates - are projected into future periods.
Such misuse of extrapolation is especially error-prone when used for planning or valuation purposes.
