If a CGFM wants to utilize data on population growth, housing and employment to estimate sales tax revenue, the CGFM should use

Regression analysis is a statistical method used to model and analyze the relationship between a dependent variable (in this case, sales tax revenue) and one or more independent variables (population growth, housing, employment). By establishing a mathematical equation that describes this relationship, a CGFM can use current or projected data for the independent variables to estimate or forecast the dependent variable. This makes it the ideal tool for the scenario described, where the goal is to predict revenue based on specific economic indicators.

B. a cash flow analysis: This method tracks the movement of cash within an entity for liquidity and solvency assessment, not for forecasting revenue based on external economic factors.

C. a payback analysis: This is a capital budgeting technique used to determine the time required to recover an investment's initial cost, which is unrelated to revenue estimation.

D. flow charting: This is a graphical tool for visualizing a process or workflow; it is not a quantitative technique for statistical forecasting or estimation.

1. AGA. (2023). CGFM Examination 2 Study Guide: Governmental Accounting, Financial Reporting and Budgeting. Chapter 6, "Analytical Methods," discusses various techniques for financial analysis and forecasting. It identifies regression analysis as a key quantitative method for forecasting revenues by relating them to economic variables like population and employment.

2. Mikesell, J. L. (2018). Fiscal administration: Analysis and applications for the public sector (10th ed.). In Chapter 13, "Revenue Forecasting," Mikesell explains that multiple regression is a standard and powerful method used by governments to forecast revenues. The text details how independent variables (e.g., population, personal income, employment) are used to predict a dependent variable (e.g., sales tax collections) (pp. 455-458).

3. Franklin, A. L. (2009). "Revenue Forecasting." In Handbook of Public Financial Management, edited by J. R. Bartle, 221-241. CRC Press. This academic text, used in public administration programs, explicitly describes regression analysis as a causal or econometric method for revenue forecasting. It states, "Regression analysis is used to estimate the relationship between a dependent variable (the revenue source) and one or more independent variables (the economic variables that influence the revenue source)" (p. 229).