Which data would be categorized as external data for planning purposes?

Which data would be categorized as external data for planning purposes?

• A. Market trends
• B. Prior year's budget
• C. Internal policies
• D. Salaries

Answer: (A)

External data for planning comes from outside the organization and helps you gauge market conditions, demand, and the competitive landscape. Market trends fit this because they reflect changes in the broader environment beyond your company—things like shifts in consumer behavior, industry growth, and economic indicators that influence planning and forecasting. The other items originate internally: a prior year's budget is internal financial planning based on past resources; internal policies are guidelines developed within the organization; salaries represent internal compensation costs. While useful for budgeting and governance, they come from inside the company, not the external environment.

External data for planning comes from outside the organization and helps you gauge market conditions, demand, and the competitive landscape. Market trends fit this because they reflect changes in the broader environment beyond your company—things like shifts in consumer behavior, industry growth, and economic indicators that influence planning and forecasting. The other items originate internally: a prior year's budget is internal financial planning based on past resources; internal policies are guidelines developed within the organization; salaries represent internal compensation costs. While useful for budgeting and governance, they come from inside the company, not the external environment.