Which analysis technique is based on independent variables that affect a revenue source?

Regression analysis is a statistical technique that examines the relationship between independent variables and a dependent variable, allowing for a deeper understanding of how specific factors influence a revenue source. This technique is particularly useful in identifying patterns and predicting future revenue by using historical data.

In the context of revenue forecasting, regression analysis allows analysts to quantify how various independent variables, such as economic indicators, demographic changes, or policy decisions, impact revenue generation. By establishing this relationship, decision-makers can create models that predict future revenues based on anticipated changes in these independent variables.

This method stands out because it provides a data-driven and objective approach to forecasting, in contrast to techniques that may rely heavily on historical data patterns, subjective judgments, or simplistic assumptions. It allows for more robust and explanatory models that can be tested and refined with actual data, making it a powerful tool in capital and operating budgeting.