Tuesday night's 4-0 home defeat the hands of Leeds United dropped the Reds into the relegation zone and made clear the job on Cotterill's hands after an intial upturn if fortunes following his appointment.
"It is very difficult when you come in mid-season," he said.
"I could have chopped and changed the team.
"I could have played nearly everyone in the squad. But, if I had done that, we would have had no continuity at all.
"At the moment, what I am doing – and it will take me another couple of months, probably – is going through the squad, to see who is who and who will play the best with who."
One positive note for the club on Tuesday night was the progress of the Forest youngsters into the next round of the FA Youth Cup after a win a Sunderland.