Stacey Vanek-Smith

So let's say you have just been hired as a CFO.

Congratulations.

You get a fancy corner office, a huge salary, and an assistant who knows your coffee order.

Meanwhile, you have one very major responsibility.

Every quarter, Wall Street will have some expectations about how much money your company should have earned over the last three months.

Your job?

Hit it or exceed it by just a little bit.

Sarah Williamson is the CEO of FCLT Global.

She explains that every quarter, a bunch of Wall Street analysts and industry experts look at a bunch of data about your company and your industry.

Just like a meteorologist, they gather all sorts of trends, all sorts of data.

They analyze it.

They try to predict what's coming next.

And a few weeks before you actually report your earnings, Wall Street will come up with one number, a tally of all these earnings guesstimates.

And just like a weather forecaster, sometimes they're right and sometimes they're wrong.

So if their estimates are not what the company delivers, the language used is that the company hit or missed.

But you'd never say, you know, the sky hit or missed the forecast.

It may be nonsensical, but if you miss that forecast, things will get stormy pretty fast.

So say instead of earning $100 million one quarter, like Wall Street guesstimates you will, your company earns $99,999,999.99.

It is a disaster if they miss it by a penny.

A crisis.