Ex-ante

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The term ex-ante (sometimes written ex ante or exante) is a neo-Latin word meaning "before the event".^[1] Ex-ante is used most commonly in the commercial world, where results of a particular action, or series of actions, are forecast in advance. The opposite of ex-ante is ex-post (or ex post).

For instance, in the financial world, the Ex-ante Return is the expected return of an investment portfolio that is calculated from a proportional weighting of the expected returns of its component assets. In calculating this return, the results assumed for each possible expected return must be calculated as accurately as possible in order for the Ex-ante return to be close to the actual return.

Another example of the use of the term ex-ante is in the recruitment industry: Ex-ante is often used when forecasting resource requirements on large future projects. When the word ex-ante is used in this context, an extremely high level of expertise is implied. This is of the utmost importance in large construction and engineering projects, where accuracy is crucial. By using the ex-ante method, businesses are able to be thoroughly precise when planning, thus making sure the correct resources are available at the moment they are needed. The slightest slip in the quality of the professionalism and standards can result in a catastrophic effect for the businesses concerned.

In the business world, forward planning is crucial. Using the Ex-ante method provides the greatest possibility of achieving targets. Ex-ante allows businesses to achieve high levels of success, and therefore continue to forward plan effectively for the foreseeable future.

Meeting expectations is crucial, as is shows that one is able to forecast effectively, whereas if the business were to underachieve or overachieve too greatly, it will indicate an inability to forecast accurately. The company's stakeholders would likely perceive this negatively.

Ex-ante forecasting enables companies to build a model that allows the future to be predicted accurately and therefore to enhance efficiency and profitability.