Income Statement, Balance Sheet, & Cash Flow Projections Model Templates
In business, a financial plan can refer to the three primary financial statements (balance sheet, income statement, and cash flow statement) created within a business plan. Financial forecast or financial plan can also refer to an annual projection of income and expenses for a company, division or department. A financial plan can also be an estimation of cash needs and a decision on how to raise the cash, such as through borrowing or seeking equity investment.
Estimating future financial performance plays a big part in the life of start-ups and corporations large and small. By looking ahead, companies can proactively manage changes. Financial projections usually involve a 3 to 5 year future outlook for the income statement (or profit and loss statement, P&L statement), balance sheet, and cash flow statement.
Start-ups can use the financial projections to build solid business plans and raise capital. The income statement projections model template, balance sheet projections model template, and the cash flow projections model template is about making rigorous financial projections: not only about assessing the future, but by also including past performance. The financial statements projection model template techniques build robust financial projections using Microsoft Excel. There are various approaches, the main two being — bottom up and top down — into a well-rounded projection that will help you analyze revenue and expenses, anticipate changes, and incorporate company goals in a realistic picture of your company’s future.
Arguably, the most difficult aspect of preparing a financial forecast is predicting revenue. Future costs can be estimated by using historical accounting data; variable costs are also a function of sales.