DEFINITION of 'Undercast'
BREAKING DOWN 'Undercast'
There are a number of factors that may lead to undercasting values. The primary reason for undercasting involves using the wrong inputs. For example, when estimating the net income of a company for next year, you may undercast the amount if you overestimate costs or underestimate sales. You may have expected sales to be $5 million and costs to be $3 million. This forecasts a net income of $2 million. If actual net income was $2.5 million, you would have undercast the income by $500,000.