12 month projection and business plan template

Free Financial Templates for a Business Plan

By Andy Marker | July 29, 2020

• Share on Facebook
• Share on LinkedIn

Link copied

In this article, we’ve rounded up expert-tested financial templates for your business plan, all of which are free to download in Excel, Google Sheets, and PDF formats.

Included on this page, you’ll find the essential financial statement templates, including income statement templates , cash flow statement templates , and balance sheet templates . Plus, we cover the key elements of the financial section of a business plan .

Financial Plan Templates

Download and prepare these financial plan templates to include in your business plan. Use historical data and future projections to produce an overview of the financial health of your organization to support your business plan and gain buy-in from stakeholders

Business Financial Plan Template

Use this financial plan template to organize and prepare the financial section of your business plan. This customizable template has room to provide a financial overview, any important assumptions, key financial indicators and ratios, a break-even analysis, and pro forma financial statements to share key financial data with potential investors.

Download Financial Plan Template

Word | PDF | Smartsheet

Financial Plan Projections Template for Startups

This financial plan projections template comes as a set of pro forma templates designed to help startups. The template set includes a 12-month profit and loss statement, a balance sheet, and a cash flow statement for you to detail the current and projected financial position of a business.

‌ Download Startup Financial Projections Template

Excel | Smartsheet

Income Statement Templates for Business Plan

Also called profit and loss statements , these income statement templates will empower you to make critical business decisions by providing insight into your company, as well as illustrating the projected profitability associated with business activities. The numbers prepared in your income statement directly influence the cash flow and balance sheet forecasts.

Pro Forma Income Statement/Profit and Loss Sample

Use this pro forma income statement template to project income and expenses over a three-year time period. Pro forma income statements consider historical or market analysis data to calculate the estimated sales, cost of sales, profits, and more.

‌ Download Pro Forma Income Statement Sample - Excel

Small Business Profit and Loss Statement

Small businesses can use this simple profit and loss statement template to project income and expenses for a specific time period. Enter expected income, cost of goods sold, and business expenses, and the built-in formulas will automatically calculate the net income.

‌ Download Small Business Profit and Loss Template - Excel

3-Year Income Statement Template

Use this income statement template to calculate and assess the profit and loss generated by your business over three years. This template provides room to enter revenue and expenses associated with operating your business and allows you to track performance over time.

Download 3-Year Income Statement Template

For additional resources, including how to use profit and loss statements, visit “ Download Free Profit and Loss Templates .”

Cash Flow Statement Templates for Business Plan

Use these free cash flow statement templates to convey how efficiently your company manages the inflow and outflow of money. Use a cash flow statement to analyze the availability of liquid assets and your company’s ability to grow and sustain itself long term.

Simple Cash Flow Template

Use this basic cash flow template to compare your business cash flows against different time periods. Enter the beginning balance of cash on hand, and then detail itemized cash receipts, payments, costs of goods sold, and expenses. Once you enter those values, the built-in formulas will calculate total cash payments, net cash change, and the month ending cash position.

Download Simple Cash Flow Template

12-Month Cash Flow Forecast Template

Use this cash flow forecast template, also called a pro forma cash flow template, to track and compare expected and actual cash flow outcomes on a monthly and yearly basis. Enter the cash on hand at the beginning of each month, and then add the cash receipts (from customers, issuance of stock, and other operations). Finally, add the cash paid out (purchases made, wage expenses, and other cash outflow). Once you enter those values, the built-in formulas will calculate your cash position for each month with.

‌ Download 12-Month Cash Flow Forecast

3-Year Cash Flow Statement Template Set

Use this cash flow statement template set to analyze the amount of cash your company has compared to its expenses and liabilities. This template set contains a tab to create a monthly cash flow statement, a yearly cash flow statement, and a three-year cash flow statement to track cash flow for the operating, investing, and financing activities of your business.

Download 3-Year Cash Flow Statement Template

For additional information on managing your cash flow, including how to create a cash flow forecast, visit “ Free Cash Flow Statement Templates .”

Balance Sheet Templates for a Business Plan

Use these free balance sheet templates to convey the financial position of your business during a specific time period to potential investors and stakeholders.

Small Business Pro Forma Balance Sheet

Small businesses can use this pro forma balance sheet template to project account balances for assets, liabilities, and equity for a designated period. Established businesses can use this template (and its built-in formulas) to calculate key financial ratios, including working capital.

Download Pro Forma Balance Sheet Template

Monthly and Quarterly Balance Sheet Template

Use this balance sheet template to evaluate your company’s financial health on a monthly, quarterly, and annual basis. You can also use this template to project your financial position for a specified time in the future. Once you complete the balance sheet, you can compare and analyze your assets, liabilities, and equity on a quarter-over-quarter or year-over-year basis.

Download Monthly/Quarterly Balance Sheet Template - Excel

Yearly Balance Sheet Template

Use this balance sheet template to compare your company’s short and long-term assets, liabilities, and equity year-over-year. This template also provides calculations for common financial ratios with built-in formulas, so you can use it to evaluate account balances annually.

Download Yearly Balance Sheet Template - Excel

For more downloadable resources for a wide range of organizations, visit “ Free Balance Sheet Templates .”

Sales Forecast Templates for Business Plan

Sales projections are a fundamental part of a business plan, and should support all other components of your plan, including your market analysis, product offerings, and marketing plan . Use these sales forecast templates to estimate future sales, and ensure the numbers align with the sales numbers provided in your income statement.

Basic Sales Forecast Sample Template

Use this basic forecast template to project the sales of a specific product. Gather historical and industry sales data to generate monthly and yearly estimates of the number of units sold and the price per unit. Then, the pre-built formulas will calculate percentages automatically. You’ll also find details about which months provide the highest sales percentage, and the percentage change in sales month-over-month. 

Download Basic Sales Forecast Sample Template

12-Month Sales Forecast Template for Multiple Products

Use this sales forecast template to project the future sales of a business across multiple products or services over the course of a year. Enter your estimated monthly sales, and the built-in formulas will calculate annual totals. There is also space to record and track year-over-year sales, so you can pinpoint sales trends.

Download 12-Month Sales Forecasting Template for Multiple Products

3-Year Sales Forecast Template for Multiple Products

Use this sales forecast template to estimate the monthly and yearly sales for multiple products over a three-year period. Enter the monthly units sold, unit costs, and unit price. Once you enter those values, built-in formulas will automatically calculate revenue, margin per unit, and gross profit. This template also provides bar charts and line graphs to visually display sales and gross profit year over year.

Download 3-Year Sales Forecast Template - Excel

For a wider selection of resources to project your sales, visit “ Free Sales Forecasting Templates .”

Break-Even Analysis Template for Business Plan

A break-even analysis will help you ascertain the point at which a business, product, or service will become profitable. This analysis uses a calculation to pinpoint the number of service or unit sales you need to make to cover costs and make a profit.

Break-Even Analysis Template

Use this break-even analysis template to calculate the number of sales needed to become profitable. Enter the product's selling price at the top of the template, and then add the fixed and variable costs. Once you enter those values, the built-in formulas will calculate the total variable cost, the contribution margin, and break-even units and sales values.

Download Break-Even Analysis Template

For additional resources, visit, “ Free Financial Planning Templates .”

Business Budget Templates for Business Plan

These business budget templates will help you track costs (e.g., fixed and variable) and expenses (e.g., one-time and recurring) associated with starting and running a business. Having a detailed budget enables you to make sound strategic decisions, and should align with the expense values listed on your income statement.

Startup Budget Template

Use this startup budget template to track estimated and actual costs and expenses for various business categories, including administrative, marketing, labor, and other office costs. There is also room to provide funding estimates from investors, banks, and other sources to get a detailed view of the resources you need to start and operate your business.

Download Startup Budget Template

Small Business Budget Template

This business budget template is ideal for small businesses that want to record estimated revenue and expenditures on a monthly and yearly basis. This customizable template comes with a tab to list income, expenses, and a cash flow recording to track cash transactions and balances.

Download Small Business Budget Template

Professional Business Budget Template

Established organizations will appreciate this customizable business budget template, which  contains a separate tab to track projected business expenses, actual business expenses, variances, and an expense analysis. Once you enter projected and actual expenses, the built-in formulas will automatically calculate expense variances and populate the included visual charts. 

‌ Download Professional Business Budget Template

For additional resources to plan and track your business costs and expenses, visit “ Free Business Budget Templates for Any Company .”

Other Financial Templates for Business Plan

In this section, you’ll find additional financial templates that you may want to include as part of your larger business plan.

Startup Funding Requirements Template

This simple startup funding requirements template is useful for startups and small businesses that require funding to get business off the ground. The numbers generated in this template should align with those in your financial projections, and should detail the allocation of acquired capital to various startup expenses.

Download Startup Funding Requirements Template - Excel

Personnel Plan Template

Use this customizable personnel plan template to map out the current and future staff needed to get — and keep — the business running. This information belongs in the personnel section of a business plan, and details the job title, amount of pay, and hiring timeline for each position. This template calculates the monthly and yearly expenses associated with each role using built-in formulas. Additionally, you can add an organizational chart to provide a visual overview of the company’s structure. 

Download Personnel Plan Template - Excel

Elements of the Financial Section of a Business Plan

Whether your organization is a startup, a small business, or an enterprise, the financial plan is the cornerstone of any business plan. The financial section should demonstrate the feasibility and profitability of your idea and should support all other aspects of the business plan. 

Below, you’ll find a quick overview of the components of a solid financial plan.

• Financial Overview: This section provides a brief summary of the financial section, and includes key takeaways of the financial statements. If you prefer, you can also add a brief description of each statement in the respective statement’s section.
• Key Assumptions: This component details the basis for your financial projections, including tax and interest rates, economic climate, and other critical, underlying factors.
• Break-Even Analysis: This calculation helps establish the selling price of a product or service, and determines when a product or service should become profitable.
• Pro Forma Income Statement: Also known as a profit and loss statement, this section details the sales, cost of sales, profitability, and other vital financial information to stakeholders.
• Pro Forma Cash Flow Statement: This area outlines the projected cash inflows and outflows the business expects to generate from operating, financing, and investing activities during a specific timeframe.
• Pro Forma Balance Sheet: This document conveys how your business plans to manage assets, including receivables and inventory.
• Key Financial Indicators and Ratios: In this section, highlight key financial indicators and ratios extracted from financial statements that bankers, analysts, and investors can use to evaluate the financial health and position of your business.

Need help putting together the rest of your business plan? Check out our free simple business plan templates to get started. You can learn how to write a successful simple business plan  here . 

Visit this  free non-profit business plan template roundup  or download a  fill-in-the-blank business plan template  to make things easy. If you are looking for a business plan template by file type, visit our pages dedicated specifically to  Microsoft Excel ,  Microsoft Word , and  Adobe PDF  business plan templates. Read our articles offering  startup business plan templates  or  free 30-60-90-day business plan templates  to find more tailored options.

Discover a Better Way to Manage Business Plan Financials and Finance Operations

Empower your people to go above and beyond with a flexible platform designed to match the needs of your team — and adapt as those needs change. 

The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. 

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.  Try Smartsheet for free, today.

Discover why over 90% of Fortune 100 companies trust Smartsheet to get work done.

• Start free trial

Start selling with Shopify today

Start your free trial with Shopify today—then use these resources to guide you through every step of the process.

How To Create Financial Projections for Your Business Plan

Building a financial projection as you write out your business plan can help you forecast how much money your business will bring in.

Planning for the future, whether it’s with growth in mind or just staying the course, is central to being a business owner. Part of this planning effort is making financial projections of sales, expenses, and—if all goes well—profits.

Even if your business is a startup that has yet to open its doors, you can still make projections. Here’s how to prepare your business plan financial projections, so your company will thrive.

What are business plan financial projections?

Business plan financial projections are a company’s estimates, or forecasts, of its financial performance at some point in the future. For existing businesses, draw on historical data to detail how your company expects metrics like revenue, expenses, profit, and cash flow to change over time.

Companies can create financial projections for any span of time, but typically they’re for between one and five years. Many companies revisit and amend these projections at least annually. 

Creating financial projections is an important part of building a business plan . That’s because realistic estimates help company leaders set business goals, execute financial decisions, manage cash flow , identify areas for operational improvement, seek funding from investors, and more.

What are financial projections used for? 

Financial forecasting serves as a useful tool for key stakeholders, both within and outside of the business. They often are used for:

Business planning

Accurate financial projections can help a company establish growth targets and other goals . They’re also used to determine whether ideas like a new product line are financially feasible. Future financial estimates are helpful tools for business contingency planning, which involves considering the monetary impact of adverse events and worst-case scenarios. They also provide a benchmark: If revenue is falling short of projections, for example, the company may need changes to keep business operations on track.

Projections may reveal potential problems—say, unexpected operating expenses that exceed cash inflows. A negative cash flow projection may suggest the business needs to secure funding through outside investments or bank loans, increase sales, improve margins, or cut costs.

When potential investors consider putting their money into a venture, they want a return on that investment. Business projections are a key tool they will use to make that decision. The projections can figure in establishing the valuation of your business, equity stakes, plans for an exit, and more. Investors may also use your projections to ensure that the business is meeting goals and benchmarks.

Loans or lines of credit 

Lenders rely on financial projections to determine whether to extend a business loan to your company. They’ll want to see historical financial data like cash flow statements, your balance sheet , and other financial statements—but they’ll also look very closely at your multi-year financial projections. Good candidates can receive higher loan amounts with lower interest rates or more flexible payment plans.

Lenders may also use the estimated value of company assets to determine the collateral to secure the loan. Like investors, lenders typically refer to your projections over time to monitor progress and financial health.

What information is included in financial projections for a business?

Before sitting down to create projections, you’ll need to collect some data. Owners of an existing business can leverage three financial statements they likely already have: a balance sheet, an annual income statement , and a cash flow statement .

A new business, however, won’t have this historical data. So market research is crucial: Review competitors’ pricing strategies, scour research reports and market analysis , and scrutinize any other publicly available data that can help inform your projections. Beginning with conservative estimates and simple calculations can help you get started, and you can always add to the projections over time.

One business’s financial projections may be more detailed than another’s, but the forecasts typically rely on and include the following:

True to its name, a cash flow statement shows the money coming into and going out of the business over time: cash outflows and inflows. Cash flows fall into three main categories:

Income statement

Projected income statements, also known as projected profit and loss statements (P&Ls), forecast the company’s revenue and expenses for a given period.

Generally, this is a table with several line items for each category. Sales projections can include the sales forecast for each individual product or service (many companies break this down by month). Expenses are a similar setup: List your expected costs by category, including recurring expenses such as salaries and rent, as well as variable expenses for raw materials and transportation.

This exercise will also provide you with a net income projection, which is the difference between your revenue and expenses, including any taxes or interest payments. That number is a forecast of your profit or loss, hence why this document is often called a P&L.

Balance sheet

A balance sheet shows a snapshot of your company’s financial position at a specific point in time. Three important elements are included as balance sheet items:

• Assets. Assets are any tangible item of value that the company currently has on hand or will in the future, like cash, inventory, equipment, and accounts receivable. Intangible assets include copyrights, trademarks, patents and other intellectual property .
• Liabilities. Liabilities are anything that the company owes, including taxes, wages, accounts payable, dividends, and unearned revenue, such as customer payments for goods you haven’t yet delivered.
• Shareholder equity. The shareholder equity figure is derived by subtracting total liabilities from total assets. It reflects how much money, or capital, the company would have left over if the business paid all its liabilities at once or liquidated (this figure can be a negative number if liabilities exceed assets). Equity in business is the amount of capital that the owners and any other shareholders have tied up in the company.

They’re called balance sheets because assets always equal liabilities plus shareholder equity. 

5 steps for creating financial projections for your business

• Identify the purpose and timeframe for your projections
• Collect relevant historical financial data and market analysis
• Forecast expenses
• Forecast sales
• Build financial projections

The following five steps can help you break down the process of developing financial projections for your company:

1. Identify the purpose and timeframe for your projections

The details of your projections may vary depending on their purpose. Are they for internal planning, pitching investors, or monitoring performance over time? Setting the time frame—monthly, quarterly, annually, or multi-year—will also inform the rest of the steps.

2. Collect relevant historical financial data and market analysis

If available, gather historical financial statements, including balance sheets, cash flow statements, and annual income statements. New companies without this historical data may have to rely on market research, analyst reports, and industry benchmarks—all things that established companies also should use to support their assumptions.

3. Forecast expenses

Identify future spending based on direct costs of producing your goods and services ( cost of goods sold, or COGS) as well as operating expenses, including any recurring and one-time costs. Factor in expected changes in expenses, because this can evolve based on business growth, time in the market, and the launch of new products.

4. Forecast sales

Project sales for each revenue stream, broken down by month. These projections may be based on historical data or market research, and they should account for anticipated or likely changes in market demand and pricing.

5. Build financial projections

Now that you have projected expenses and revenue, you can plug that information into Shopify’s cash flow calculator and cash flow statement template . This information can also be used to forecast your income statement. In turn, these steps inform your calculations on the balance sheet, on which you’ll also account for any assets and liabilities .

Business plan financial projections FAQ

What are the main components of a financial projection in a business plan.

Generally speaking, most financial forecasts include projections for income, balance sheet, and cash flow.

What’s the difference between financial projection and financial forecast?

These two terms are often used interchangeably. Depending on the context, a financial forecast may refer to a more formal and detailed document—one that might include analysis and context for several financial metrics in a more complex financial model.

Do I need accounting or planning software for financial projections?

Not necessarily. Depending on factors like the age and size of your business, you may be able to prepare financial projections using a simple spreadsheet program. Large complicated businesses, however, usually use accounting software and other types of advanced data-management systems.

What are some limitations of financial projections?

Projections are by nature based on human assumptions and, of course, humans can’t truly predict the future—even with the aid of computers and software programs. Financial projections are, at best, estimates based on the information available at the time—not ironclad guarantees of future performance.

Keep up with the latest from Shopify

Get free ecommerce tips, inspiration, and resources delivered directly to your inbox.

By entering your email, you agree to receive marketing emails from Shopify.

popular posts

The point of sale for every sale.

Subscribe to our blog and get free ecommerce tips, inspiration, and resources delivered directly to your inbox.

Unsubscribe anytime. By entering your email, you agree to receive marketing emails from Shopify.

Latest from Shopify

Aug 16, 2024

Learn on the go. Try Shopify for free, and explore all the tools you need to start, run, and grow your business.

Try Shopify for free, no credit card required.

• Business Planning
• Cash Flow Forecasting
• Scenario Planning
• Financial Reporting
• Financial Planning & Analysis
• For Enterprises
• For Franchises
• Case Studies
• Partnerships
• Software Integrations
• Templates & Downloads

A large update to Brixx has been released (15.04.24) - read about it here . Please clear cache/cookies in your browser if you encounter difficulties in loading the app.

Financial Forecasting Template for Startups

To begin effective and accurate financial planning for startups , you will need three key reports: a Balance Sheet, a Cash Flow Statement, and a Profit and Loss Statement (sometimes called an Income Statement). From these, you will be able to put together the five main components of your financial projection and use them effectively within your business plan.

They are one of the most important elements of any business plan, so it’s important to get them right. Whether you plan to use them to help you win over investors, obtain bank loans, or produce a long-term growth strategy for your business, financial forecasts can help your business in a number of ways.

Creating financial projections for startups

This post continues on with our topic of creating an effective business plan. Here, we focus on the fact that financial projections are not only essential to a new startup’s business plan. We emphasise that they are also essential to you as a business owner. Financial projections are able to help you gain a solid grasp of your company’s financial health.

As a rule of thumb, your financial projection should be 5 years long, with monthly figures shown for at least the first 12 months. In some cases, you may only be asked for a 12-month projection or a 3-year plan. But you can beat both of these expectations – and there are good reasons to do so.

When looking at the above image of a Profit and Loss Statement, it showcases that 5 years is long enough to plan what the business will look like when it has matured, something most startups don’t think about.

Why a 5-year projection?

“But,” I hear you ask, “how can I plan anything accurately over 5 years? I haven’t even started my business yet!”

The answer is – you don’t need to plan accurately that far ahead. Planning accurately more than a few months into the future is impossible. But plans do not need to be 100% accurate – they need to be well informed and grounded in reasonable expectations and research. Any long term plan you make will turn out differently in reality. But right now, making that plan is the only way you can gain insight into what might happen in the future.

A 5-year financial projection gives the business enough time to demonstrate what it will be like after its startup period – when it is fully established and running optimally. 5 years also gives you the potential to look to the future of the business – how it will expand its horizons after getting up and running.

The organisational principles we’ll cover are applicable whether you’re planning in Brixx or creating your own projection from scratch. While Brixx simplifies things for you by completing all of the calculations for your reports and makes it easy to restructure and test your plan, it is entirely your choice whether to use specialised software or spreadsheet for your startup’s financial projections.

What is the aim of using a financial forecast template?

What are we going to get out of it and actually present in our startup business plan? Here’s a quick list.

Three detailed financial reports:

• Cash Flow Forecast
• Profit & Loss Forecast 
• Balance Sheet Forecast 

And some quick takeaway information:

• General Assumptions
• Sales Forecasting
• Startup Costs
• Running Costs
• Salaries & Contracts
• Funding Requirements

The three financial reports form the backbone of your financial projection, while the quick takeaway information is an easily digestible way of displaying this information.

Now, the three reports I mentioned above may sound intimidating – and the truth is they use language and concepts which can take a little while to pick up! While they seem a bit alien at first, what’s important to understand is that each report is just a different way of viewing what’s going on financially in your business. Each report is made of the data you have gathered, just arranged in a standardised way. With these reports, you can create a comprehensive financial projection that will elevate your business plan or even an investor pitch.

Keep in mind

It is also worth noting that you should be able to test your financial projections. Why? Well, for a start, that’s what a lot of investors will be asking you for! What happens if sales are lower, or a project doesn’t reach completion on time? What happens if a vehicle breaks down and needs repairs or replacement? Can the business handle this – and what are the knock-on effects? All of these questions and more are easy to answer if every element of your financial plan is a modular component that you can add, change or remove without affecting the validity of the projection’s calculations.

It is crucial to keep record of your projections, documents, etc. Depending on your business plan’s audience, you may need to include items that support your statements and/or figures in the plan. These might include important staff member CVs and detailed market/competitor research data, etc. Some information will go in the appendix section, allowing you to expand on the information you’ve supplied throughout.

Understanding cash flow in your startup’s financial projection reports

The cash that comes into the business, and the cash that goes out of the business. The Cash Flow shows when cash (digital or physical) actually changes hands in these transactions. To me, cash flow is the simplest report to understand, as it shows what is the case at any given time.

Before we move into the next section, you’re going to need a spreadsheet or a piece of software like Brixx to build your Cash Flow Forecast. If you don’t fancy trying Brixx then we also have a free cash flow template which you can build it in too.

The Cash Flow Report in your financial projections

The Cash Flow Report takes into account when cash actually changes hands. The Profit & Loss Statement accounts for when the transaction agreement takes place. Let’s say you deliver a product/service immediately to your customer and they then pay you a month later. An electrician, for example, might complete some work, and then send an invoice for payment. The electrician’s charge for their work appears on their business’ Profit and Loss Report when they send the invoice, but the cash payment only appears on their business’ Cash Flow Report when they actually get paid by their customers.

This delay between the sale happening and the cash being received is part of what makes the Cash Flow Report so useful. Many businesses, even large and established ones, can suffer from a lack of ready cash. If this business can’t pay its bills this will ultimately lead to the failure of the business. Making a cash flow forecast is a means of looking ahead and trying to foresee and mitigate these problems before they happen. This can be done by identifying the periods and time and areas of the business that are a cause for concern, cash-wise.

Key questions the cash flow can answer:

• How much cash in hand the business has every month
• The consequences of projects, payments or purchases happening at unexpected times
• The toll each type of cash flow has on net cash
• Will the business stay afloat!?

Key cash flow information:

The cash flow is made up of several ‘cash flows’ – each representing different kinds of business activity, as well as ‘bottom line’ totals of these cash flows.

Understanding your Cash Flow Report

Cash flows from operating activities.

The day-to-day operations of the business: income from sales, minus the cost of sales, minus overheads like rent, electricity, paying interest and salaries.

Cash Flows from Investing Activities

The purchase and sale of assets, investments and income gained from interest on savings are recorded here. These are activities that in many cases are outside of the day-to-day running of the business. Initial asset purchases may be necessary to get the business up and running in the first place or replace existing assets that are crucial to the business but they aren’t a regular part of the business’s revenue stream or monthly bills.

Cash Flows from Financing Activities

Financing activities show where the business gets its funding from. Additionally, financing is cash received from sources external to the business, like loans or external investment. These financing cash flows also include dividends the business pays to shareholders and loan repayments to lenders.

Cash Flows from Taxation

The tax you pay and any tax refunds are included here.

Income Less Payments

This line shows the net cash movement in any given month, that is, the total of all the cash flows mentioned above. This is great for helping you identify problem periods of the year.

Closing Bank Position

The real ‘bottom line’, Closing Bank Position shows the amount of cash in your bank account/s at the end of each month. If this goes negative, the business has serious problems. This is why cash flow forecasting is so important, especially for small businesses. Splitting out these different cash flows makes this report easier to understand. It also allows each flow of cash to be compared to the others. You may find for example that you have a healthy operating cash flow but the business’ investing activities are taking too great a toll on the business’s net cash flow to continue unabated.

An overview of profit and loss in your startup’s financial projections

The P&L records the profits and losses made by the business. How do you make a loss? It’s a way of saying that something the business owns has lost value. The P&L takes into account when, or over how long transactions are agreed, rather than when cash actually changes hands.

Key questions the profit & loss can answer:

• What are the business’ Gross Profit, Operating Profit and Profit for a given period?
• Can the business afford to take on new projects?
• What non-cash losses is the business suffering?
• How are dividends related to profit?

Key information on profit and loss

Gross profit.

Gross profit is revenue from sales minus the direct costs of those sales. This is often formulated as a percentage called gross profit margin, showing the cost of selling as a % of the sale.

Operating Profit

What is Operating Profit? It is Gross Profit, minus any indirect overheads (cost of goods, services and salaries). Operating profit shows how well the business can support itself by its activities alone. Therefore it is useful gauge for whether a business can take on new projects or other costly activities.

Net profit takes into account all of the business’ extra expenditure that is not taken into account under Operating Profit. This includes investments, interest charged, interest received and taxation.

To read more about the Profit and Loss Report – check out this article: A Beginner’s Guide to the Profit and Loss Forecast Report  . If you’re still confused, here’s my attempt at busting the confusion! How to understand the Profit and Loss Statement and why it’s confusing .

Getting a handle on your financial projection’s Balance Sheet section

The Balance Sheet shows the financial position of the business at any given time. It shows what it owns (assets) balanced with what it owes (liabilities) and the money that has been invested in it (equity).

This all sounds pretty esoteric, but it boils down to “how risky is the business – how much does it own and how much does it owe?”

Key questions the balance sheet can answer:

• Value of the business’s assets
• Size of the business’s debt
• What funds the business, debt or investment?
• How risky is the business for investors?

Information on the Balance Sheet

These are what the business owns. Assets include physical things like cars and computers, and also cash and investments.

Liabilities

Liabilities are what the business owes. A business with a large ratio of liabilities to assets may be seen as risky as it funds itself with debts which must be paid off, no matter the state of the business.

Equity shows the net value of the business. It’s the same figure as net assets – the businesses’ assets minus its liabilities. Breaking down equity further, it shows who owns the business, whether this is a single owner or a group of investors.

From these three core reports, you or an accountant should be able to work out any additional information you may be asked for.

Use financial projection templates for more than just your startup’s business plan

Now that we’ve covered financial projections for your startup’s business plan, be sure to download your free Business Plan Template to help you format your plan correctly.

Remember, financial projections are useful for more than just your startup’s business plan or for seeking funding. These plans are able to help you better understand the potential risks you may face.

There are always risks when starting a new business. Your startup business plan document should be a persuasive tool to help get support for your business. However, it should also be honest. The people who look at your business plan, whether they are investors or future-you, need to have the risks and your plans for mitigating them laid out.

In most cases, these risks will be financial in nature. The business doesn’t make enough money – either because the product is not good enough, it can’t attract enough customers, or there is a misalignment between what the business is offering and what the market requires.

With a comprehensive financial projection for your startup’s business plan, you can more easily see potential risk down the line. Brixx can help you reduce the stress and time wastage of setting up spreadsheets and formulae to keep track of and project your financials.

Related articles

• SWOT Analysis For Startups
• How to Start Your Business Plan Online for Free
• A quick guide to setting up and running your business
• How to easily forecast your startup’s cash flow

Get started with Brixx

Financial Projections 12-Month Template

Identify the scope and objectives for financial projections, gather historical financial data, study company's financial trends, identify relevant economic indicators.

• 1 Inflation rates
• 2 Interest rates
• 3 GDP growth rates
• 4 Industry-specific factors

Prepare sales projections

• 1 Time-Series Analysis
• 2 Regression Analysis
• 3 Market Research
• 4 Expert Opinion

Calculate projected expenses

• 1 Personnel costs
• 2 Operating expenses
• 3 Marketing expenses
• 4 Research and development expenses

Assess potential impact of external factors

• 1 Market conditions
• 2 Regulatory changes
• 3 Competitive landscape
• 4 Technological advancements

Estimate net income

Create projected balance sheet, develop cash flow forecast, draft comparative financial statements, approval: prepared projections.

• Create projected balance sheet Will be submitted
• Develop cash flow forecast Will be submitted
• Draft comparative financial statements Will be submitted

Perform sensitivity analysis

• 1 Sales volume
• 2 Sales price
• 3 Variable cost
• 4 Fixed cost
• 5 Interest rate

Adjust projections based on sensitivity analysis results

• 1 Scenario Analysis
• 2 Financial Modeling
• 3 Expert Opinion

Present finalized financial projections to stakeholders

Approval: final projections.

• Perform sensitivity analysis Will be submitted
• Adjust projections based on sensitivity analysis results Will be submitted
• Present finalized financial projections to stakeholders Will be submitted

Documentation of the entire financial projections

Filing and secure data storage, take control of your workflows today., more templates like this.

Plan Projections

ideas to numbers .. simple financial projections

Home > Financial Projections Template Excel

Financial Projections Template Excel

This free 4 page Excel business plan financial projections template produces annual income statements, balance sheets and cash flow projections for a five year period for any business.

Financial Projections Template Download

What’s included in the financial projection template, 1. income statements.

The first page of the financial projection template shows income statements for the business for 5 years.

2. Balance Sheets

3. Cash Flow Statements

The third page provides the cash flow statements for 5 years.

4. Ratios and Graphs

The final page of the financial projections template contains a selection of useful financial ratios for comparison purposes. In addition it shows revenue, net income, cash balance, and cumulative free cash flow by year in graph form for easy reference.

How to use the Financial Projections Template

If you want to know how to use the financial projections template, then we recommend reading our How to Make Financial Projections post, which explains each step in detail.

More Financial Projections Templates and Calculators

Select a category from the menu to the right or chose one of the templates or calculators below.

Popular Revenue Projection Templates

• Retail Store Revenue Projection
• Drop Shipping Business Revenue Projection
• Sandwich Shop Revenue Projection
• Salon Business Plan Revenue Projection
• Microbrewery Business Plan Revenue Projection

Popular Calculators

• Days Sales Outstanding Calculator
• Return on Investment Calculator
• Sales Forecast Spreadsheet
• Gross Margin Calculator
• Business Operating Expenses Template

Financial projections are critical to the success of your business plan, particularly if the purpose is to raise finance.  Accordingly we have designed our financial projection for startup template to help you test your business idea and create a five year business plan financial projection.

The financial projection template will help you to carry out your own financial projections and test your business idea. Therefore simply amend the highlighted input elements to suit your purposes, and the financial projection template does the rest.

Alternatively, you can use our online calculator to provide a quick and easy way to test the feasibility of your business idea.

About the Author

Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. Michael has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

How To Create Startup Financial Projections [+Template]

Businesses run on revenue, and accurate startup financial projections are a vital tool that allows you to make major business decisions with confidence. Financial projections break down your estimated sales, expenses, profit, and cash flow to create a vision of your potential future.

In addition to decision-making, projections are huge for validating your business to investors or partners who can aid your growth. If you haven’t already created a financial statement, the metrics in this template can help you craft one to secure lenders.

Whether your startup is in the seed stage or you want to go public in the next few years, this financial projection template for startups can show you the best new opportunities for your business’s development.

In this article:

• What is a startup financial projection?
• How to write a financial projection
• Startup expenses
• Sales forecasts
• Operating expenses
• Income statements
• Balance sheet
• Break-even analysiFinancial ratios Startup financial
• rojections template

What is a financial projection for startups?

A financial projection uses existing revenue and expense data to estimate future cash flow in and out of the business with a month-to-month breakdown.

These financial forecasts allow businesses to establish internal goals and processes considering seasonality, industry trends, and financial history. These projections cover three to five years of cash flow and are valuable for making and supporting financial decisions.

Financial projections can also be used to validate the business’s expected growth and returns to entice investors. Though a financial statement is a better fit for most lenders, many actuals used to validate your forecast are applied to both documents.

Projections are great for determining how financially stable your business will be in the coming years, but they’re not 100% accurate. There are several variables that can impact your revenue performance, while financial projections identify these specific considerations:

• Internal sales trends
• Identifiable risks
• Opportunities for growth
• Core operation questions

To help manage unforeseeable risks and variables that could impact financial projections, you should review and update your report regularly — not just once a year. 

How do you write a financial projection for a startup?

Financial projections consider a range of internal revenue and expense data to estimate sales volumes, profit, costs, and a variety of financial ratios. All of this information is typically broken into two sections:

• Sales forecasts : includes units sold, number of customers, and profit
• Expense budget : includes fixed and variable operating costs

Financial projections also use existing financial statements to support your estimated forecasts, including:

• Income stateme
• Cash flow document

Gathering your business’s financial data and statements is one of the first steps to preparing your complete financial projection. Next, you’ll import that information into your financial projection document or template.

This foundation will help you build the rest of your forecast, which includes:

• Cash flow statements
• Break-even analysis
• Financial ratios

Once all of your data is gathered, you can organize your insights via a top-down or bottom-up forecasting methods.

The top-down approach begins with an overview of your market, then works into the details of your specific revenue. This can be especially valuable if you have a lot of industry data, or you’re a startup that doesn’t have existing sales to build from. However, this relies on a lot of averages and trends will be generalized.

Bottom-up forecasting begins with the details of your business and assumptions like your estimated sales and unit prices. You then use that foundation to determine your projected revenue. This process focuses on your business’s details across departments for more accurate reporting. However, mistakes early in forecasting can compound as you “build up.”

1. Startup expenses

If your startup is still in the seed stage or expected to grow significantly in the next few quarters, you’ll need to account for these additional expenses that companies beyond the expansion phase may not have to consider.

Depending on your startup stage, typical costs may include:

• Advertising and marketing
• Lawyer fees
• Licenses and permits
• Market research
• Merchandise
• Office space
• Website development

Many of these costs also fall under operating expenses, though as a startup, items like your office space lease may have additional costs to consider, like a down payment or renovation labor and materials.

2. Sales forecasts

Sales forecasts can be created using a number of different forecasting methods designed to determine how much an individual, team, or company will sell in a given amount of time.

This data is similar to your financial projections in that it helps your organization set targets, make informed business decisions, and identify new opportunities. A sales forecast report is just much more niche, using industry knowledge and historical sales data to determine your future sales. Gather data to include:

• Customer acquisition cost (CAC)
• Cost of goods sold (COGS)
• Sales quotas and attainment
• Pipeline coverage
• Customer relationship management (CRM) score
• Average Revenue Per User (ARPU), typically used for SaaS companies

Sales forecasts should consider interdepartmental trends and data, too. In addition to your sales process and historical details, connect with other teams to apply insights from:

• Marketing strategies for the forecast period
• New product launches
• Financial considerations and targets
• Employee needs and resources from HR

Your sales strategy and forecasts are directly tied to your financial success, so an accurate sales forecast is essential to creating an effective financial projection.

3. Operating expenses

Whereas the costs of goods solds (aka Cost of Sales or COGS) account for variable costs associated with producing the products or services you produce, operating expenses are the additional costs of running your startup, including everything from payroll and office rent to sales and marketing expenses.

In addition to these fixed costs, you’ll need to anticipate one-time costs, like replacing broken machinery or holiday bonuses. If you’ve been in business for a few years, you can take a look at previous years’ expenses to see what one-time costs you ran into, or estimate a percentage of your total expenses that contributed to variable costs.

4. Cash flow statements

Cash flow statements (CFS) compare a business’s incoming cash totals, including investments and operating profit, to their expected expenses, including operational costs and debt payments.

Cash flow shows a company’s overall money management and is one of three major financial statements, next to balance sheets and income statements. It can be calculated using one of two methods:

• Direct Method : calculates actual cash flow in and out of the company
• Indirect Method : adjusts net income considering non-cash revenue and expenses

Businesses can use either method to determine cash flow, though presentation differs slightly. Typically, indirect cash flow methods are preferred by accountants who largely use accrual accounting methods .

5. Income statements

Your income statement projection utilizes your sales forecasts, estimated expenses, and existing income statements to calculate an expected net income for the future.

In addition to the hard numbers available, you should apply your industry expertise to consider new opportunities for your business to grow. If you’re entering Series C, you should anticipate the extra investments and big returns that you’re aiming to experience this round.

Once you’ve collected your insights, use your existing income statement to track your estimated revenue and expenses. Total each and subtract the expenses from the revenue projections to determine your projected income for the period.

 6. Balance sheet

Your balance sheet is the final of the big three financial documents needed to establish your company’s financial standing. The balance sheet makes a case for your company’s financial health and future net worth using these details:

• Company’s assets
• Business’s liabilities
• Shareholders’ equity

This document breaks down the company’s owned assets vs. debt items. It most directly tracks earnings and spendings, and it also doubles as an actual to establish profitability for prospective investors.

7. Break-even analysis

Launching a startup or new product line requires a significant amount of capital upfront. But at some point, your new endeavor will generate a profit. A break-even analysis identifies the moment that your profit equals the exact amount of your initial investment, meaning you’ve broken even on the launch and you haven’t lost or gained money.

A break-even point (BEP) should be identified before launching your business to determine its viability. The higher your BEP, the more seed money you’ll need or the longer it will be until operations are self-sufficient.

Of course, you can also increase prices or reduce your production costs to lower the BEP.

As your business matures, you can use the BEP to weigh risks with your product decisions, like implementing a new product or removing an existing item from the mix.

8. Financial ratios

Financial ratios are common metrics that lenders use to check financial health using data from your financial statements. There are five core groups of financial ratios used to evaluate businesses, as well as an example of each:

Efficiency ratios : Analyze a company’s assets and liabilities to determine how efficiently it manages resources and its current performance.

Formula : Asset turnover ratio = net sales / average total assets

Leverage ratios : Measure a company’s debt levels compared to other financial metrics, like total assets or equity.

Formula : Debt ratio = total liabilities / total assets

Liquidity ratios : Compare a company’s liquid assets and its liabilities to lenders to determine its ability to repay debt.

Formula : Current ratio = current assets / current liabilities

Market value ratios : Determine a public company’s current stock share price.

Formula : Book value per share (BVPS) = (shareholder’s equity - preferred equity) / total outstanding shares

Profitability ratios : Utilize revenue, operating costs, equity, and other other balance sheet metrics to asses a company’s ability to generate profits.

Formula : Gross profit margin = revenue / COGS

Graphs and charts can provide visual representations of financial ratios, as well as other insights like revenue growth and cash flow. These assets provide an overview of the financial projections in one place for easy comparison and analysis.

Startup Financial Projections Template

As a startup, you have some extra considerations to apply to your financial projections. Download and customize our financial projections template for startups to begin importing your financial data and build a road map for your investments and growth. 

Plan for future success with HubSpot for Startups

A sound financial forecast paves the way for your next moves and reassures investors (and yourself) that your business has a bright future ahead. Use our startup financial projections template to estimate your revenue, expenses, and net income for the next three to five years.

Ready to invest in a CRM to help you increase sales and connect with your customers? HubSpot for Startups offers sales, marketing, and service software solutions that scale with your startup. 

Get the template

• TemplateLab

Financial Projections Templates

34 simple financial projections templates (excel,word).

A financial projections template is a tool that is an essential part of managing businesses as it serves as a guide for the various team to achieve the desired goals. The preparation of these projections seems like a difficult task, especially for small businesses. If you can come up with financial statements , then you can also make financial projections.

Table of Contents

• 1 Financial Projections Templates
• 2 When do you need a financial projections template?
• 3 Business Projections Templates
• 4 What to include in financial projections?
• 5 Financial Forecast Templates
• 6 How do I make a financial projection?
• 7 Revenue Projection Templates

When do you need a financial projections template?

A financial projections template uses estimated or existing financial information to forecast the future expenses and income of your business. These projections don’t just consider a single scenario but different ones so you can determine how the changes in one part of your finances might affect the profitability of your company.

If you have to create a financial business projections template for your business, you can download a template to make the task easier. Financial projection has become an important tool in business planning for the following reasons:

• If you’re starting a business venture, a financial projection helps you plan your start-up budget.
• If you already have a business, a financial projection helps you set your goals and stay on track.
• If you’re thinking about getting outside financing, you need a financial projection to convince investors or lenders of the potential of your business.

Business Projections Templates

What to include in financial projections?

A financial projections template usually includes a few financial statements that will help you achieve better financial performance for your business:

• Income Statement Also called the Profit and Loss Statement , this focuses on your company’s expenses and revenues generated for a specific period of time. A typical income statement includes expenses, revenue, losses, and gains. The sum of all these is the net income, a measure of your company’s profitability.
• Cash Flow Statement Taking a look at a cash flow statement makes you understand how your company’s operations work. The statement explains in detail how much money goes in and out of your business in the form of either expense or income. This document includes the following: Operating Activities The cash flow from operating activities reports cash outflows and inflows from your company’s daily operations. This includes changes in accounts receivable, cash, inventory, accounts payable, and depreciation. Investing Activities You use the cash flows from investing activities for your company’s investments into the long-term future. This includes cash outflows for purchases of fixed assets like equipment and property and cash inflows for sales of assets. Financing Activities The financial activities in a cash flow statement show your business’ sources of cash from either banks or investors along with expenditures of cash you have paid to your shareholders. Total these at the end of each period to determine either a loss or a profit. The cash flow statement gets connected to the income statement through net income. To make this document, it requires the reconciliation of the two documents. You can calculate net profitability or income in the income statement which you then use to start the cash flow from the operations category in your cash flow statement.
• Balance Sheet This is a statement of your business’ liabilities, assets, and capital at a specific point in time. It details the balance of expenditure and income over the preceding period. This document provides you with a general overview of your business’ financial health. Here is an overview of these components: Assets These are your business’ resources with economic value that your business owns and which you believe will provide some benefit in the future. Examples of such future benefits include reducing expenses, enhancing sales, or generating cash flow. Assets typically include inventory, property, and cash. Liabilities In general, these refer to the obligations of your business to other entities. In more common terms, these are the debts that your business incurs in your daily operations. It typically includes loans and accounts payable. You can classify liabilities either as short-term or long-term. Owner’s Equity This is the amount you have left after you have paid off your liabilities. It is usually classified as retained earnings – the sum of your net income earned minus all the dividends you have paid since the start of your business.

Together with your break-even analysis and financial statements, you can include any other document that will help explain the assumptions behind your cash flow and financial forecast template.

Financial Forecast Templates

How do I make a financial projection?

The creation of a financial projections template requires the same information to use whether your business is still in its planning stages or it’s already up and running. The difference is whether you’re creating your revenue projection template using historical financial information or if you need to start from scratch.

This includes the creation of projections based on your own experiences or by conducting market research in the industry in which your business will operate. Here are some tips for creating an effective business plan financial projections template:

• Create the sales projection An important component of your business projections template is the sales projections. A business that’s already running can base its projections on its past performance, which you can derive from financial statements. When creating your sales projections, you must consider some external factors like the projected and current health of your company, if your inventory will get affected by additional tariffs, or if there is a downturn in your industry. Even if you want to remain optimistic about your business, you have to make realistic plans.
• Create the expense projection At the onset, the creation of an expense projection seems simpler because it’s much easier to predict the possible expenses of your business than it is to predict potential customers or their buying habits. If you have experience working in a certain industry, you can predict with some degree of accuracy what your fixed expenses are and any recurring expenses. But when it comes to one-time expenses that have the potential to bring down your business, these are much harder to predict. The best thing you can do in this scenario is to project expenses to the best of your ability then increase this value by 15%.
• Come up with a balance sheet for your financial projections template If you have a business that has been in operation for a couple of months, you can come up with a balance sheet using accounting software. The balance sheet shows your business’ financial status, listing its liabilities, equity, and assets balance for a certain time period. Use the current totals in your balance sheet when making your financial projections, In doing so, you will make better predictions on where your business will be a few years in the future. If you’re still in the planning stage of a business, you can create a balance sheet based on the data you’ve gathered from industry research.
• Create the income statement projection If you have a business that is currently in operation, you can create an income statement projection using your existing income statements to create an estimate of your business’ projected numbers. This is a logical move since an income statement provides a picture of your business’s net income after subtracting things like taxes, cost of goods, and other expenses. One of the main purposes of the income statement is to provide an idea of your business’ current performance. It also serves as the basis for estimating your net income for the next couple of years. If your business is still in the planning stages, the creation of a potential income statement shows that you have conducted extensive research and created a diligent and well-crafted estimate of your income in the next couple of years. If you have uncertainties on how to start creating an income statement projection, you can consult with market research firms in your locale. They can provide you with an overview of your targeted industry which includes target markets, expected and current industry growth levels, and sales.
• Come up with a cash flow projection The creation of this document is the final step leading to the completion of your financial projection. The cash flow statement is directly connected to the balance sheet and the net income statement, showing any cash-related or cash activities that can affect your industry. One of the purposes of this statement is to show how much money your business spends. This is a must for businesses obtaining financing or looking for investors. You can use this cash flow statement if your business has been in operation for a minimum of six months, but if your business is still in the planning stages, you can use the information you have gathered to create a credible projection. To make things easier for you, consider using spreadsheet software. Chances are, you’re already using spreadsheets. Using a spreadsheet will be the starting point for your financial projections. In addition, it offers flexibility that allows you to quickly judge alternative scenarios or change assumptions. Be as clear and reasonable as possible with your financial projections. Remember that financial projection is as much science as art. At some point, you will have to make assumptions on certain things like how administrative costs and raw materials will grow, revenue growth, and how efficient you will be at gathering accounts receivable for your business.

Revenue Projection Templates

More Templates

Business Budget Templates

Payment Schedule Templates

General Ledger Templates

Bill Pay Checklists

Collection Letter Templates

Personal Balance Sheets

Free 1-year Financial Projection Template

Complete the form to get your copy of this free resource!

Free excel template to create financial projections for any business startup and first year. Forecast revenue, expenses, employee costs and generate an income statement, balance sheet, and cash flow pro forma automatically

Join 15,000+ founders and consultants who have used our free resources and tools

Free 1 Year Pro Forma Template

Download our 12 months financial projection template for free.  This tool will allow you to:

• Forecast startup costs
• Project your first 12 months of product or service revenue
• Forecast your operating expenses
• Add Salary Forecasts for your employees

Once you have input all of your own assumptions, you will be able to generate:

• 12 month pro forma income statement
• 12 month cash flow forecast
• 12 month balance sheet projection
• Basic graphs and charts

This free financial model is industry agnostic.  If you need an industry specific financial model you can check out ProjectionHub’s premium pro forma templates .  

Below you will be able to see some examples of the input and outputs of the projection spreadsheet. 

Financial Model Input Examples

Below you will be able to see examples of the input tabs for startup costs, fixed assets, revenue, operating expenses and salaries. 

Example of Startup Cost Forecast

The financial model input assumptions tab will include general assumptions and startup costs like your fixed assets like buildings, equipment, leasehold improvements and vehicles.  On the input assumptions tab you will also be able to include startup cost assumptions like initial inventory. 

12 Month Revenue Forecast Example

Our revenue assumptions tab will allow you to forecast your number of customers, the products or services they purchase, the purchase price and the percentage of total units sold represented by each product. You can see a quick example of our revenue model below:

Startup Operating Expense Projections Example

You can enter in your operating expense projections for your startup in the table below.  It will allow you to add expenses as a fixed monthly expense or a percentage of revenue. 

Startup Salary Forecasting Example

The last input tab is our salary forecast assumptions.  You can set a salary, employer taxes, benefits, the month the employee starts and ends, and the number of the particular employee.  

Projection Template Output Examples

Our free financial model spreadsheet will produce 12 months of income statement, cash flow and balance sheet projections.  You can see examples of each of these outputs below along with some of the basic charts and graphs that will be included. 

Example of a 12 Month Pro Forma P&L

Below you will see an example of our income statement pro forma output. 

Cash Flow Forecast 12 Month Example

Next you will see an example of our cash flow forecast output with cash from operating activities, financing and investing activities. 

Balance Sheet Forecast Example for 12 Months

The balance sheet forecast output will include 12 months of forecasted assets and liabilities as seen below:

Pro Forma Graphs

Finally, our free template includes a profit and loss at a glance, a monthly sales forecast and graph to display monthly sales, gross profit and net income.  

If you are needing a more tailored template to your industry as well as 5 years of projections, we have 100+ different industry templates to choose from as well:

Examples: Restaurant, Trucking, SaaS, Airbnb, Brewery, Dentist, etc.

Check out our Highly Rated Financial Projection Templates

Cash Flow - Business Plan Forecast Template

Use our business plan financial projections template to create financial projections for a business plan which includes 12 monthly periods and 5 annual periods. The template includes a detailed income statement, cash flow statement and balance sheet in Excel. Cash flow projections are based on user defined turnover, gross profit and expense values and automated calculations based on a series of assumptions.

• Includes 12 monthly & 5 annual periods
• Suitable for service and trade based businesses
• Reporting periods based on a single user input cell
• User input limited to basic template assumptions
• Expense accounts can be customized & more accounts added
• Automated income statement, cash flow statement & balance sheet
• Accommodates loan amortization or interest-only loans
• Includes sales tax, income tax, payroll accruals & dividends

How to use the Cash Flow - Business Plan Forecast template

This template enables users to create cash flow projections for a business plan which includes 12 monthly periods and five annual periods. The template includes a monthly income statement, cash flow statement and balance sheet. The cash flow projections are based on turnover, gross profit and expense values that are entered by the user as well as a number of default assumptions which are used to create an automated balance sheet. These assumptions include opening balance sheet balances, working capital ratios, payroll accruals, sales tax, income tax, dividends and loans. The monthly reporting periods are based on any user defined start date.

Note: We have included 12 monthly and 5 annual reporting periods in this template because this format is frequently required by financial institutions when submitting business plans. If you only require annual cash flow projections, refer to our Annual Cash Flow Projections template and if you only require monthly cash flow projections, refer to our Monthly Cash Flow Projections template.

The following sheets are included in the template: Assumptions - this sheet includes the default assumptions on which the monthly & annual cash flow projections are based. IncState - this sheet includes a detailed monthly income statement for 12 monthly periods and 5 annual periods. All the rows that are highlighted in yellow in column A require user input and the codes in column A are mainly used in the sales tax, receivables & payables calculations. The rows that do not contain yellow highlighting in column A contain formulas and are therefore calculated automatically. CashFlow - as with the income statement, only the rows with yellow highlighting in column A require user input. All the other rows contain formulas and are therefore calculated automatically. BalanceSheet - all balance sheet calculations are based on the template assumptions and the income statement & cash flow statement calculations. No user input is therefore required on this sheet. Loans1 to Loans3 & Leases - these sheets include detailed amortization tables which are used to calculate the interest charges and capital repayment amounts that are included on the income statement and cash flow statement. Each sheet provides for a different set of loan repayment terms to be specified.

Note: If you do not want to include any of the line items that are listed on the income statement, cash flow statement or balance sheet, we recommend hiding these items instead of deleting them. If you delete items which are used in other calculations, these calculations will result in errors which you then need to fix or remove.

Business Name & Reporting Periods

The business name and the start date for the cash flow projections need to be entered at the top of the Assumptions sheet. The business name is included as a heading on all the sheets and the reporting periods which are included in the template are determined based on the start date that is specified. This date is used as the first month and the 11 subsequent months and four subsequent years are added to form the 5 year projection period.

The income statement and cash flow statement only require user input where there is yellow highlighting in column A and the user input only relates to the 12 monthly periods. All annual totals are calculated automatically and all rows without yellow highlighting are calculated automatically in both the monthly and annual columns.

Income Statement

All monthly income statement projections need to be entered exclusive of any sales tax that may be applicable.

Turnover & Gross Profits

Monthly turnover values need to be entered on the IncState sheet for the first 12 months. The projected monthly gross profit percentages also need to be entered on this sheet and are used in order to calculate the gross profit values. The monthly cost of sales projections are calculated by simply deducting the gross profit values from the monthly turnover values.

The year 2 to 5 turnover amounts are calculated based on the totals for the first year and adjusted by the annual turnover growth rates that are specified on the Assumptions sheet. Gross profit percentages for each turnover line need to be entered on the IncState sheet. Gross profit values and cost of sales totals are calculated automatically.

The template includes two default lines in each of these sections - one for a typical product based item and one for a typical service based item. The template can therefore be used for both service and trade based businesses. There are no cost of sales and gross profit values in service based businesses and a gross profit percentage of 100% can therefore be specified. You can also hide the cost of sales and gross profit sections if you do not want to include them in your cash flow projections.

Note: You can insert as many additional line items as required by inserting the required number of items in each section and then entering the appropriate values where user input is required or copying the formulas from one of the existing lines. We recommend inserting additional line items between the two existing default line items.

Note: The codes in column A are used in the sales tax and trade receivables calculations. The first two characters represent the sales tax code and the last two characters represent the payment status. Refer to the Balance Sheet - Sales Tax and Balance Sheet - Trade Receivables sections for more information on these codes.

Other Income

Monthly projections of other income should be entered in this row. Note that other income may consist of items like interest or dividends received and this line item is therefore not included in trade receivables and sales tax calculations. If you want to include other income in the trade receivables or sales tax calculations, you need to add the income to the Turnover section as an additional line item.

The year 2 to 5 totals for other income are calculated by applying the annual turnover growth percentages on the Assumptions sheet to the previous year's total.

Operating Expenses

All the monthly operating expense projections need to be entered in the operating expenses section of the income statement. The template contains 22 default operating expense line items but you can add as many additional items as required or delete the line items that you do not need. When adding additional line items, remember to copy the formulas in the total columns from one of the existing line items.

The year 2 to 5 totals for operating expenses are calculated by applying the annual expense inflation percentages on the Assumptions sheet to the previous year's total.

Note: The codes in column A are used in the sales tax and trade payables calculations. The first two characters represent the sales tax code and the last two characters represent the payment status. Refer to the Balance Sheet - Sales Tax and Balance Sheet - Trade Payables sections for more information on these codes.

Staff Costs

All the monthly staff cost projections need to be entered in the staff costs section of the income statement. The template contains 2 default staff cost line items but you can add as many additional items as required or delete the line items that you do not need.

The year 2 to 5 totals for staff costs are calculated by applying the annual expense inflation percentages on the Assumptions sheet to the previous year's total.

Note: Staff costs have been included in a separate section on the income statement in order to be able to calculate payroll accruals. If you do not need to include payroll accruals in your cash flow projections, we recommend entering nil values and hiding these rows. If you delete the section, some of the payroll accrual formulas may result in errors and you therefore may need to delete them as well.

Depreciation & Amortization

Monthly & annual projections for depreciation and amortization charges need to be calculated independently of the template and included in this section. We unfortunately cannot include default depreciation or amortization calculations because some businesses may have very different asset bases than others with existing assets which may already have been depreciated over a number of years. Any calculation which is based on a percentage of the balance sheet asset value may therefore not be accurate.

If you already have a sheet which is used for depreciation or amortization calculations, you can include it in this template and add formulas in the depreciation & amortization section of the income statement to include your calculations in the appropriate line items.

The monthly depreciation & amortization charges for the first 12 months need to be included on the IncState sheet and the totals for year 2 to 5 need to be included on the Assumptions sheet.

We also realize that some users may want to include depreciation and amortization as part of their operating expenses. We have therefore provided for this in that the depreciation and amortization calculations on the cash flow statement are based on the default code which is included in column A. You can therefore enter nil values in the depreciation & amortization section on the income statement, hide the section and include these line items in the operating expenses section and as long as you also include the default codes in column A, the cash flow statement values for depreciation and amortization will be calculated correctly.

Interest Paid

All interest paid calculations are automated and based on the amortization tables on the Loans1 to Loans3 and Leases sheets. The template accommodates the inclusion of loans & leases based on four different sets of loan repayment terms which need to be specified on the Assumptions sheet.

Opening loan balances are based on the balance sheet opening balances section on the Assumptions sheet and additional loan amounts can be entered in column C of the appropriate amortization table.

You do not need to use all four loan amortization sheets - if you only need to include loans based on one set of repayment terms, you can delete the other loan amortization sheets, delete the other interest paid rows on the income statement, delete the other proceeds from loans rows on the cash flow statement, delete the other repayment of loans rows on the cash flow statement and delete the other loan balances from the balance sheet.

The template provides for four sets of loan repayment terms - the same amortization table can basically be used for all loans with the same repayment terms by adding additional loan amounts as proceeds to the cash flow statement in order to add new loans to the appropriate amortization table.

If you need to add more than four sets of loan repayment terms, you will need to copy one of the amortization sheets, change it to reflect the appropriate loan terms and then change the formulas in the amortization table to be based on the correct loan repayment terms at the top of the sheet. This means that you need to add another set of repayment terms to the Assumptions sheet and link the fields at the top of the new amortization table to the appropriate cells on the Assumptions sheet.

If there is an opening balance for the required additional loan terms, you need to include a new code in the balance sheet opening balances section on the Assumptions sheet and base the opening balance calculation in the first period of the amortization schedule on this code. You also need to add new rows to the interest paid section on the income statement, the loan proceeds section on the cash flow statement, the loan repayment section on the cash flow statement and the loan balances section on the balance sheet. The appropriate formulas can be copied from one of the existing items and the sheet reference in the copied formula can then just be replaced by the sheet name of the new amortization table that you've added.

The taxation line item on the income statement is automatically calculated based on the profit before tax and the income tax assumptions which are specified on the Assumptions sheet. If you do not want to include income tax in the cash flow projections, simply enter an income tax rate of 0%. This will result in no income tax being calculated.

If you do want to include income tax calculations, the appropriate income tax percentage needs to be entered in the Income Tax section on the Assumptions sheet. You can also enter a value for an assessed loss (as a positive value) which may have been carried over from a previous tax year which would result in income tax only being calculated after profits exceed the value of the assessed loss.

You also need to specify the payment frequency in months and the first calendar month in which a payment needs to be included. The template automatically provides for income tax based on what is due and includes the income statement amount and a provision for taxation on the balance sheet. The payment frequency and month of payment assumptions are then used to determine when the income tax liability will be settled which will result in the appropriate cash outflow being recorded on the cash flow statement and the provision for taxation being reduced.

The template can accommodate income tax calculations based on current and subsequent month payments. If you select the Current option, the income tax payment amount will be calculated based on all amounts that have accrued up to and including the month of payment. If you select the Subsequent option, the income tax payment amount will only be calculated based on all amounts which have accrued up to the previous month end.

Example: If you select the Current option in the Income Tax section of the Assumptions sheet, all income tax amounts up to and including the current month will be included in the income tax payment amount. This means that the provision for taxation at the end of the particular month will be nil. The Current setting is therefore usually appropriate for provisional taxpayers.

Example: If you select the Subsequent option, all amounts up to and including the previous month end will be included in the income tax payment amount. The provision for taxation balance on the balance sheet will therefore not be nil at the end of the month of payment and include the current month's income tax charge.

The template also includes automated dividends calculations. If you do not want to include any dividends in your cash flow projections, you can simply specify a dividend percentage of zero percent.

If you want to include dividend calculations, you need to specify a dividend percentage which will be applied to the profit for the period in order to calculate the dividend value. You also need to specify the frequency in months of dividend payments and the first payment month. The frequency of dividends determines when the dividends are included on the income statement and the first month of payment determines when the dividend payment is included on the cash flow statement (only has an effect if the dividend payment option is Subsequent).

You can also specify whether the dividend is paid in the month of calculation (Cash option), the month after calculation (Next option) or in a subsequent month. When you elect the subsequent month option, the payment of the dividend will be included based on the relative position of the first month of payment in relation to the year-end period (which is determined based on the template start date at the top of the Assumptions sheet).

Example: If you want to include a dividend in the last month of each financial year, select a payment frequency of 12 months and month 12 as the first payment month. Then select the Cash option in order to include both the dividend on the income statement and the payment in the last month of the year.

Example: If you want to include a dividend in the last month of each financial year but delay payment to the first month of the next financial year, select a payment frequency of 12 months and month 12 as the first payment month. Then select the Next option in order to include the dividend on the income statement in the last month of the financial year and the payment in the first month of the next financial year. A dividend payable amount will then automatically be included on the balance sheet at year-end.

Balance Sheet

All the calculations on the balance sheet are automated and no user input is therefore required.

Opening Balances

If you need to compile cash flow projections for an existing business, you will need to include the opening balance sheet balances at the start of the cash flow projection period. This is facilitated in the Balance Sheet Opening Balances section on the Assumptions sheet. The opening balances that are entered here are included in the first column on the balance sheet.

You can use the trial balance as at the end of the period immediately before the start of the cash flow projection period for this purpose. All assets should have positive balances and all equity & liabilities should have negative balances. The opening balances should also balance to a total of nil as with any accounting system trial balance. If you enter balances and the total of all balances is not nil, the entire opening balances section on the Assumptions sheet will be highlighted in orange.

You then need to fix the imbalance by adjusting the opening balances so that the total comes to a total of nil. The orange highlighting will then be removed automatically. Also note that the cash flow projection balance sheet cannot balance if the opening balances do not balance.

Note: If you are preparing a cash flow projection for a new business, you can include zero balances for all the balance sheet items in the opening balances section.

Non-Current Assets

The property, plant & equipment balances on the balance sheet are calculated by adding the purchases of property, plant & equipment (entered on the cash flow statement for the first 12 months and on the Assumptions sheet for year 2 to 5) and then deducting the appropriate depreciation charges that are included on the income statement.

Intangible assets balances are calculated in much the same way by adding the purchases of intangible assets (as per the cash flow statement for the first 12 months and the Assumptions sheet for year 2 to 5) and deducting the appropriate amortization charges as per the income statement. The calculation of the investments balances on the balance sheet is a bit simpler in that only the purchases of new investments (as per the cash flow statement for the first 12 months and the Assumptions sheet for your 2 to 5) are added to the previous period's balance and there is no depreciation or amortization on investments.

Note: Purchases of property, plant & equipment, intangible assets and investments all need to be entered as negative values. The purchases for the first 12 months need to be entered on the cash flow statement and the purchases for year 2 to 5 need to be entered on the Assumptions sheet.

Current Assets - Inventory

The inventory balances on the balance sheet are calculated based on the inventory days assumption which is specified on the Assumptions sheet. The number of days that are entered here is applied to the monthly cost of sales in order to calculate the appropriate inventory balance. This calculation is based on the actual number of days in each month if the inventory days assumption is greater than the number of days in the appropriate month.

Example: If you enter an inventory days assumption of 60 days and the month is April, the entire cost of sales value for April will be included in the inventory balance because April only has 30 days. After including the 30 days in April, there is a difference of 30 days between the 60 days assumption and the 30 days in April. The March cost of sales balance will therefore be used, divided by the 31 days in March and multiplied by the 30 remaining days. The inventory balance at the end of April will therefore consist of the cost of sales total for April and an equivalent of 30 days of the 31 day cost of sales of March.

Note: The above calculation principle is applied regardless of the number of days which are entered as the inventory days assumption on the Assumptions sheet even if the value of the inventory days assumption requires the inclusion of more than 2 months. This method of calculation is the most accurate way of projecting inventory balances even for businesses where there is significant sales volatility.

Note: If your business does not carry inventory, you can simply enter a nil value in the inventory days assumption on the Assumptions sheet. The inventory line on the balance sheet will then also contain nil values.

If you want to include variable monthly inventory days, you can do so by changing the inventory days assumption in the Workings section of the balance sheet which has been included below the section with the ratios. Simply replace the formula which links the inventory days assumption to the value on the Assumptions sheet by overwriting it with the appropriate inventory days value.

The year 2 to 5 inventory balances are calculated by applying the annual turnover growth percentage to the inventory balance at the end of year 1. This method ensures that the monthly trend in year 1 is reflected in the year 2 to 5 balances. If you amend the inventory days in the Workings section of the balance sheet, the amended days for the appropriate year will be used in the calculation.

Current Assets - Trade Receivables

The trade receivables balances on the balance sheet are calculated based on the debtors days assumption which is specified on the Assumptions sheet. The debtors days number can be determined based on the average trading terms which has been negotiated with customers. The debtors days is applied to the monthly turnover in order to calculate the appropriate trade receivables balance. This calculation is based on the actual number of days in each month if the debtors days assumption is greater than the number of days in the appropriate month.

Example: If you enter a debtors days assumption of 60 days and the month is April, the entire turnover value for April will be included in the trade receivables balance because April only has 30 days. After including the 30 days in April, there is a difference of 30 days between the 60 days assumption and the 30 days in April. The March turnover balance will therefore be used, divided by the 31 days in March and multiplied by the 30 remaining days. The trade receivables balance at the end of April will therefore consist of the turnover total for April and an equivalent of 30 days of the 31 day turnover of March.

Note: The above calculation principle is applied regardless of the number of days which are entered in the debtors days assumption on the Assumptions sheet even if the value of the debtors days assumption requires the inclusion of more than 2 months. This method of calculation is the most accurate way of projecting trade receivable balances even for businesses where there is significant sales volatility.

Where sales tax is applicable, the appropriate sales tax value relating to monthly turnover will be added to the trade receivables balance. Sales tax codes are defined on the Assumptions sheet and the codes in column A next to the turnover amounts on the income statement are used to determine the appropriate rate of sales tax to be used.

The trade receivables calculation will also only include lines that are coded with a sales tax rate code (in the first two characters) and a "C1" at the end of the code. The C1 part of the code refers to credit sales while the inclusion of a C0 code at the end refers to cash sales. Cash sales do not need to be included in the trade receivables calculation and turnover lines with C0 or no code in column A are therefore ignored when calculating trade receivable balances.

Example: If the standard rate sales tax code is V1 and the appropriate turnover line needs to be included in the calculation of trade receivables, the code V1C1 needs to be added in column A of the appropriate turnover line on the income statement. If you do not want to add sales tax in the trade receivables calculation but you do want a trade receivables line to be included in the balance sheet, you can add a code which refers to a 0% sales tax calculation as well as the C1 credit sales indicator.

Example: If you do not want a particular turnover line to be included in the trade receivables calculation, you can include any sales tax rate followed by C0 in order to exclude the line in the trade receivables calculations. For example, a turnover line with a code of V1C0 would not form part of the trade receivables calculations.

Note: If your business has no trade receivables, you can simply enter a nil value in the debtors days assumption on the Assumptions sheet. The trade receivables line on the balance sheet will then also contain nil values.

If you want to include variable monthly debtors days, you can do so by changing the debtors days assumption in the Workings section of the balance sheet which has been included below the section with the ratios. Simply replace the formula which links the debtors days assumption to the value on the Assumptions sheet by overwriting it with the appropriate debtors days value.

The year 2 to 5 trade receivables balances are calculated by applying the annual turnover growth percentage to the trade receivables balance at the end of year 1. This method ensures that the monthly trend in year 1 is reflected in the year 2 to 5 balances. If you amend the debtors days in the Workings section of the balance sheet, the amended days for the appropriate year will be used in the calculation.

Current Assets - Loans & Advances, Other Receivables

The loans and advances & other receivables balances cannot be calculated by basing them on specific income statement items and they are therefore calculated by adding the movements in these balances (as per the cash flow statement for the first 12 months and the Assumptions sheet for year 2 to 5) to the balances of the previous month. If you therefore want to increase or decrease these balances, you need to add the amount of the increase or decrease to the line with a matching description on the cash flow statement (under the changes in operating assets section) for the first 12 months or the Assumptions sheet for year 2 to 5.

Current Assets - Cash & Cash Equivalents

The cash & cash equivalents balances on the balance sheet are linked to the closing cash balances on the cash flow statement. If the resulting cash & cash equivalents balance has a negative value, it will automatically be included in the bank overdraft line in the Current Liabilities section of the balance sheet.

Equity - Shareholders Contributions, Reserves

The shareholders contributions & reserves balances cannot be calculated by basing them on income statement items and they are therefore calculated by adding the movements in these balances (as per the cash flow statement for the first 12 months and the Assumptions sheet for year 2 to 5) to the balances of the previous month. If you therefore want to increase or decrease these balances, you need to add the amount of the increase or decrease to the line with a matching description on the cash flow statement or Assumptions sheet.

Note: The shareholders contribution line on the cash flow statement can be found under the cash flow from financing activities and the reserves line on the cash flow statement under the non-cash adjustments.

Equity - Retained Earnings

The retained earnings balances on the balance sheet are linked to the retained earnings for the year which is calculated on the income statement.

Non-Current Liabilities - Loans 1 to 3, Leases

The template provides for loans & leases to be included based on 4 different sets of loan repayment terms. Loans with the same repayment terms can be grouped together in the appropriate line item. There is no difference between the treatment of loans 1 to 3 and leases. If you do not have finance leases and have loans with 4 different sets of repayment terms, you can use the Leases sheet and rename the appropriate line items accordingly.

Note: The loan repayment period in years is limited to a maximum period of 30 years. If you want to include a loan repayment period which exceeds this period, you need to change the data validation settings in the appropriate input cell by selecting the data validation feature from the Data tab on the Excel ribbon and editing the maximum value of 30 which has been set in the loan repayment period cells.

Each of the loan repayment terms can be specified in the Loan Terms section on the Assumptions sheet. The loan terms include the annual interest rate, loan repayment period in years and a selection field which can be used to indicate interest-only loans. These loan repayment terms are then included at the top of the appropriate loan amortization sheet on the Loans1 to Loans3 and Leases sheets.

Note: A set of loan terms can be specified as interest-only by selecting the "Yes" option from the interest-only drop-down list in the appropriate loan terms on the Assumptions sheet. If this selection is made, the loan will be interest only and not include any loan repayments.

All the calculations on the amortization sheets are fully automated. The only user input that is required on these sheets is entering the additional loan amounts in column C. The loan terms are taken from the Assumptions sheet and the opening balances in the first row of the amortization table are based on the opening balances that are entered in the balance sheet opening balances section of the Assumptions sheet.

The loan repayments, interest charged and capital repayments are calculated based on the outstanding balances at the beginning of each period. The outstanding loan or lease balances at the end of the appropriate monthly or annual period are then included in the appropriate lines on the balance sheet.

Current Liabilities - Bank Overdraft

The bank overdraft as well as cash & cash equivalents are based on the closing cash balances which are calculated on the cash flow statement. If the appropriate monthly closing balance is negative, the balance is included as a bank overdraft and if it is positive, it is included as cash under current assets on the balance sheet.

Current Liabilities - Trade Payables

The trade payables balances on the balance sheet are calculated based on the creditors days assumption which is specified on the Assumptions sheet. The number of days that are included here can be determined based on the average trading terms which has been negotiated with suppliers.

The monthly cost of sales, operating expenses and staff costs on the income statement are added together in order to determine a monthly value on which the trade payables calculations should be based. Expenses and costs which are paid on a cash basis can be excluded from the trade payables calculation by entering a code which ends in C0 in column A on the income statement. The codes in column A start with the appropriate two character sales tax code and end with the two character payables code.

Example: The expense codes in column A for all line items that need to be included in the trade payables calculation and which need to be subject to sales tax at a standard rate should be V1C1. If the expense item is settled on a cash basis and also subject to the standard sales tax rate, the code in column A should be V1C0 which will then result in the item not being included in the trade payables calculation.

If you want to also include purchases of property, plant & equipment in the trade payables calculation, the standard code of PPE in column A on the cash flow statement needs to be amended to the appropriate code which starts with the sales tax code and ends with C1. For standard sales tax, the code will therefore be V1C1.

Like the calculation of inventory and trade receivables balances, the trade payables balances on the balance sheet are based on the actual number of days in each month if the creditors days assumption is greater than the days in the appropriate month.

Example: If you enter a creditors days assumption of 60 days and the month is April, the entire cost of sales & expense value for April will be included in the trade payables balance because April only has 30 days. After including the 30 days in April, there is a difference of 30 days between the 60 days assumption and the 30 days in April. The March cost of sales & expense balance will therefore be used, divided by the 31 days in March and multiplied by the 30 remaining days. The trade payables balance at the end of April will therefore consist of the cost of sales & expenses total for April and an equivalent of 30 days of the 31 day cost of sales & expense values of March.

Note: The above calculation principle is applied regardless of the number of days which are entered as the creditors days assumption on the Assumptions sheet even if the value of the creditors days assumption requires the inclusion of more than 2 months. This method of calculation is the most accurate way of projecting trade payables balances even for businesses where there is significant sales or expense volatility.

Where sales tax is applicable, the appropriate sales tax value relating to monthly cost of sales & expenses will be added to the trade payables balance. Sales tax codes are defined on the Assumptions sheet and the code in column A next to the cost of sales & expense amounts on the income statement are used to determine the appropriate rate of sales tax to be used.

The trade payables calculation will also only include lines that are coded with a sales tax rate code (in the first two characters) and a "C1" at the end of the code. The C1 part of the code refers to purchases on credit while the inclusion of a C0 code at the end refers to cash purchases. Cash purchases do not need to be included in the trade payables calculation and cost of sales & expense lines with C0 or no code in column A are therefore ignored when calculating trade payables balances.

Example: If the standard rate sales tax code is V1 and the appropriate cost of sales or expense line needs to be included in the calculation of trade payables, the code V1C1 needs to be added in column A of the appropriate line on the income statement. If you do not want to add sales tax in the trade payables calculation but you do want a trade payables line to be included in the balance sheet, you can add a code which refers to a 0% sales tax calculation as well as the C1 credit purchases indicator.

Example: If you do not want a particular cost of sales or expense line to be included in the trade payables calculation, you can include any sales tax rate followed by C0 in order to exclude the line in the trade payables calculations. For example, an expense or cost of sales line item with a code of V1C0 in column A on the income statement would not form part of the trade payables calculations.

Note: If your business has no trade payables, you can simply enter a nil value in the creditors days assumption on the Assumptions sheet. The trade payables line on the balance sheet will then also contain nil values.

If you want to include variable monthly creditors days, you can do so by changing the creditors days assumption in the Workings section of the balance sheet which has been included below the section with the ratios. Simply replace the formula which links the creditors days assumption to the value on the Assumptions sheet by overwriting it with the appropriate creditors days value.

The year 2 to 5 trade payables balances are calculated by applying the annual expense inflation percentage to the trade payables balance at the end of year 1. This method ensures that the monthly trend in year 1 is reflected in the year 2 to 5 balances. If you amend the creditors days in the Workings section of the balance sheet, the amended days for the appropriate year will be used in the calculation.

Current Liabilities - Sales Tax

The template accommodates the inclusion of sales tax in all relevant calculations based on four default sales tax calculation codes and any sales tax period. All income statement and cash flow statement items need to be entered exclusive of any sales tax that may be applicable and the trade receivables and trade payables balances on the balance sheet will be calculated inclusive of sales tax. The net sales tax liability is included in the Sales Tax line on the balance sheet.

The template can be used for general sales tax (GST) and value added tax (VAT) purposes. Where there is no sales tax input which reduces the sales tax liability, the codes in column A on the income statement can simply be changed to contain a sales tax code (in the first two characters of the code) which has a zero percentage. Only the sales tax codes that are included next to the turnover lines will then be included in sales tax calculations (as required by some general sales tax calculations).

The appropriate sales tax percentages can be entered in the Sales Tax section of the Assumptions sheet. The template provides for 4 default sales tax codes, each with its own sales tax percentage. The sales tax codes are numbered from V1 to V4.

The income statement contains codes in column A which affects the calculations of sales tax and trade receivables or trade payables. The first two characters of these codes determine which sales tax percentage is used in the sales tax calculations. If an income statement item needs to be excluded from sales tax calculations, you should use a sales tax code with a zero percentage on the Assumptions sheet.

Note: Each line on the income statement can therefore only be linked to one sales tax percentage. If more than one sales tax percentage needs to be applied to the same income statement item, you need to split the income statement amount into two lines and enter the appropriate sales tax codes in column A for each of the lines.

Note: If you are preparing cash flow projections for a business which is not subject to sales tax, simply enter zero percentages for all four sales tax codes.

The sales tax assumptions that need to be specified on the Assumptions sheet also include the frequency of sales tax payments (in months) and the calendar month of the first payment period. You can therefore calculate sales tax based on any period frequency from one to twelve months.

Example: If your business is subject to sales tax payments of every two months and the first payment is due in February, a frequency of 2 needs to be specified and the first payment month should be set to 2 for February. Similarly, if your business is subject to sales tax payments of every 6 months with payments due in March and August, the frequency should be set to 6 and the first payment month should be set to 3. If your business is subject to monthly sales tax payment periods, the frequency should be 1 and the first payment month should also be 1.

The Current or Subsequent setting in the Sales Tax section on the Assumptions sheet determines how the calculated sales tax amounts of the current period are handled. If you select the Current option, the sales tax amounts of the current period will be included in the calculation of the payment amount which is due in the particular month and the sales tax liability at the end of the payment month will be nil.

If you select the Subsequent setting, the sales tax amount of the current period is not included in the calculation of the payment amount and the sales tax liability at the end of the appropriate payment month will always include at least one month.

Note: The Subsequent setting is usually the appropriate setting to use for sales tax purposes. The Current settings is more applicable to tax types which are subject to provisional tax.

Example: If you set a payment frequency of 1 month, first payment month of 1 and select the Current option, the sales tax liability on the balance sheet will always be nil because the current month's sales tax will be included in the sales tax payment. If you have the same period settings and select the Subsequent option, the sales tax liability on the balance sheet will always include the current month's sales tax because the payment amount will be based on the previous month's sales tax.

Note: The first payment month setting refers to the month of payment and not the sales tax period end. There is a difference - a sales tax period may end in February with payment in March which means that the first payment month of the calendar year is actually January or month 1 (if the payment frequency is two months).

The year 2 to 5 balances for sales tax are calculated by calculating the total sales tax for the appropriate year, dividing it by twelve and then multiplying the value by the number of months that are included in the sales tax balance at the end of the first year.

Current Liabilities - Payroll Accruals

The payroll accrual on the balance sheet is based on the payroll accrual assumptions in the Working Capital section of the Assumptions sheet and the amounts in the staff costs section of the income statement. If payroll deductions are paid in the same month as they are incurred, you can set the payroll accrual percentage to zero and the payroll accrual balances on the balance sheet will also be zero.

Staff costs have been included in a separate section on the income statement to make it easier to calculate payroll accrual balances. You can however include staff costs in operating expenses but you need to ensure that you also include the "PAY" code in column A for all the staff costs that you want to include in the payroll accrual calculations.

You also need to specify the appropriate percentage of staff costs which needs to be included in your payroll accruals. This percentage should be based on the percentage of staff costs which are paid in a subsequent month and is based on the current month's staff costs. Payroll accruals usually consist of salary & wage deductions which need to be paid over to third parties and differ from entity to entity. You therefore need to calculate the appropriate payroll accrual percentage based on the composition of the salary or wage structures of all employees.

The payroll accrual assumptions that need to be specified on the Assumptions sheet also include the frequency of payroll accrual payment periods (in months) and the payment month of the first payroll accrual period. You can therefore calculate payroll accruals based on any payment period frequency from one to twelve months. The calculated payroll accruals are added together in the payroll accrual balance until the month of payment.

Example: If you need to settle payroll accruals every two months and the first payment is due in February, a frequency of 2 needs to be specified and the first payment month should be set to 2 for February. Similarly, if you settle payroll accruals every 6 months with payments due in March and August, the frequency should be set to 6 and the first payment month should be set to 3. If you settle payroll accruals on a monthly basis, the frequency should be 1 and the first payment month should also be 1.

The Current or Subsequent setting in the Payroll Accruals section on the Assumptions sheet determines how the calculated payroll accrual amounts of the current period are handled. If you select the Current option, the payroll accrual amounts of the current period will be included in the calculation of the payment amount which is due in the particular month and the payroll accrual balance at the end of the payment month will be nil.

If you select the Subsequent setting, the payroll accrual amounts of the current period are not included in the calculation of the payment amount and the payroll accrual balances on the balance sheet at the end of the appropriate payment month will always include at least one month.

Note: The Subsequent setting is usually the appropriate setting to use for payroll accrual purposes. The Current setting is more applicable to tax types which are subject to provisional tax payments where payment occurs in the same month as the tax calculation.

Example: If you set a payment frequency of 1 month, first payment month of 1 and select the Current option, the payroll accruals on the balance sheet will always be nil because the current month's payroll accruals will be included in the payment calculation. If you have the same period settings and select the Subsequent option, the payroll accruals on the balance sheet will always include the current month's payroll accrual because the payment amount will be based on the previous month's payroll accrual.

Note: The first payment month setting refers to the month of payment and not the payroll accrual period end. There is a difference - a payroll accrual period may end in February with payment in March which means that the first payment month of the calendar year is actually January or month 1 (if the payment frequency is two months).

If you want to include payroll accruals based on variable monthly payroll accrual percentages, you can do so by changing the payroll accrual percentage assumption in the Workings section of the balance sheet which has been included below the section with the ratios. Simply replace the formula which links the payroll accrual percentage assumption to the value on the Assumptions sheet by overwriting it with the appropriate payment accrual percentage.

The year 2 to 5 payroll accrual balances are calculated by adjusting the previous year's balance by the appropriate expense inflation percentage on the Assumptions sheet.

Current Liabilities - Other Accruals, Other Provisions

The other accrual & other provisions balances cannot be calculated by basing them on specific income statement items and they are therefore calculated by adding the movements in these balances (as per the cash flow statement for the first 12 months and the Assumptions sheet for year 2 to 5) to the balances of the previous period. If you therefore want to increase or decrease these balances, you need to add the amount of the increase or decrease to the line with a matching description on the cash flow statement (under the changes in operating assets section) for the first 12 months or the Assumptions sheet for years 2 to 5.

Current Liabilities - Provision for Taxation

The calculation of income tax on the income statement is based on the profit before tax on the income statement and the assumptions that are specified in the Income Tax section on the Assumptions sheet.

The profit before tax amount is multiplied by the income tax percentage on the Assumptions sheet in order to calculate the monthly or annual income tax value. If there is a loss before tax on the income statement, no income tax will be calculated but if there were profits before the period with the loss, the income tax that was calculated in previous periods will be reversed in the period with the loss.

The template also makes provision for the inclusion of an assessed loss which has been carried over from previous financial periods and income tax will only be calculated after the assessed loss has been fully reduced by profits in the projection periods.

The income tax assumptions on the Assumptions sheet also include the frequency of payment of income tax (in months) and the calendar month of the first income tax payment. You can therefore calculate a provision for income tax based on any payment period frequency from one to twelve months. The calculated income tax amounts are added together in the provision for income tax balance on the balance sheet until the month of payment.

Example: If you need to settle income tax liabilities every six months and the income tax payments are due in February and August of each year, a frequency of 6 needs to be specified and the first calendar month should be set to 2 for February. Similarly, if you settle income tax liabilities at the end of each quarter with payments due in March, June, September and December, the frequency should be set to 3 and the first payment month should also be set to 3. If you need to settle income tax liabilities 9 months after each year-end and the cash flow projection year-end is February, the frequency should be set to 12 months and the first payment month should be set to 11.

The Current or Subsequent setting in the Income Tax section on the Assumptions sheet determines how the income tax amounts of the current period are handled. If you select the Current option, the income tax amounts of the current period will be included in the calculation of the payment amount which is due in the particular month and the provision for income tax balance on the balance sheet at the end of the payment month will be nil.

If you select the Subsequent setting, the income tax amounts of the current period are not included in the calculation of the payment amount and the provision for income tax balance on the balance sheet at the end of the appropriate payment month will always include income tax for at least one month.

Note: The Current setting is usually the appropriate setting to use for income tax purposes if the entity is a provisional taxpayer which effectively means that income tax is paid in advance. If the entity is not a provisional taxpayer, the Subsequent setting should be used because income tax will be settled after being incurred.

The year 2 to 5 balances are calculated by calculating the income tax amount for the appropriate year, dividing it by 12 and multiplying the value by the number of months which needs to be included in the provision. This is determined based on the year-end period and the income tax assumptions on the Assumptions sheet.

Current Liabilities - Dividends Payable

The calculation of dividends on the income statement is based on the profit for the year on the income statement and the assumptions that are specified in the Dividends section on the Assumptions sheet. Dividends will only be calculated if you enter a dividend percentage on the Assumptions sheet - if you therefore do not want to include dividends in your cash flow projections, you can simply enter a zero value as the dividend percentage.

The dividend percentage that is specified on the Assumptions sheet is applied to the profit for the year on the income statement which can be found directly above the dividends line. Dividends will also only be calculated if there is a cumulative profit for the year.

The dividends assumptions on the Assumptions sheet also include the frequency of payment of dividends (in months) and the first calendar month of the dividend payment. You can therefore calculate dividends based on any payment period frequency from one to twelve months (although 6 or 12 months is the norm). The calculated dividends amounts are added together in the dividends payable balance on the balance sheet until the month of payment.

Example: If dividends are declared every six months, you need to specify a frequency of 6 months on the Assumptions sheet and then select the appropriate payment basis. Dividends will be reflected on the income statement every 6 months and the dividends payable balances on the balance sheet will be determined based on the first payment month and the payment option which is selected (Cash, Next or Subsequent). Similarly, if the payment frequency is set to 12 months, dividends will be included on the income statement every 12 months and the dividends payable balance will be determined based on the first payment month and the payment option.

The Cash, Next or Subsequent setting in the Dividends section on the Assumptions sheet determines how the dividends payable balances on the balance sheet are calculated and therefore also when the dividend payment will be included on the cash flow statement.

If you select the Cash option, the dividend payable balances on the balance sheet will always be nil and what this means is that the dividend payment is effectively included in the same month as the month in which the dividend is declared. The month in which the declared dividend is included is based on the payment frequency (in months) and the cash flow projection year-end.

If you select the Next option, the dividend payment will be included in the month after the month in which the dividend amount is included on the income statement. The dividend payable balance on the balance sheet will therefore only contain a balance in the dividend declaration month.

If you select the Subsequent option, dividends will be included on the income statement based on the frequency setting on the Assumptions sheet and the payment of the dividend will be delayed until the first payment month (also as per the Assumptions sheet) is reached. A dividends payable balance will be reflected on the balance sheet in all months until the payment month is reached.

Example: If you set the dividend payment frequency to 12 months, a dividend amount will be included on the income statement in the last month of the appropriate cash flow projection year. If the payment option is set to Cash, no dividend payable amount will be included on the balance sheet and the dividend payment will be included on the cash flow statement in the same month.

Example: If you set the dividend payment frequency to 12 months and the payment option is set to Next, the dividend will be included on the income statement in the last month of the appropriate cash flow projection year, the dividend payable at the end of the financial year will equal the income statement amount and the dividend payment will be included in the first month of the next financial year.

Example: If you set the dividend payment frequency to 12 months and the payment option is set to Subsequent, the dividend will be included on the income statement in the last month of the appropriate cash flow projection year and the dividend payable at the end of the financial year and all subsequent months in the new financial year until the first payment month is reached will equal the income statement amount. The dividend payment will be included in the first payment month as set on the Assumptions sheet but in the year after inclusion on the income statement.

If the cash flow projection year-end as per the above example is February, the first payment month is set to 9 for September and the Subsequent payment option is selected, the dividend will be included in February on the income statement and the same amount will be included as a dividend payable on the balance sheet from February to August of the next financial year. The dividend payment will then be included in September on the cash flow statement and the dividend payable at the end of September will be nil.

The year 2 to 5 balances are calculated based on the profit for the year, the dividend percentage and the payment status of Cash, Next or Subsequent.

Balance Sheet Errors

If the balance sheet for any monthly or annual period does not balance, the amount of the imbalance will be included in the row below the total equities & liabilities and displayed in red. The template has been designed in such a way that the balance sheet should always be in balance as long as the total of the balance sheet opening balances which are included on the Assumptions sheet is nil.

If you see an imbalance on the balance sheet, you therefore need to check the opening balance sheet balances on the Assumptions sheet and ensure that the total of all the opening balances in this section is nil.

If fixing the opening balances does not resolve your imbalance, you can e-mail our Support function and let us know what changes you have made to the formulas in the template so that we can assist you. If you have made a lot of changes, you may need to start over with the downloaded copy of the template.

Balance Sheet Workings

We have included all the calculations which form part of the calculation of balance sheet balances in the Workings section below the balance sheet ratios. These workings will not be printed and are for information purposes only. You can therefore hide this section if you do not want to see it on the sheet but do not delete any of these formulas because it will result in calculation errors if you do!

Cash Flow Statement

All the rows on the cash flow statement which require user input are indicated with yellow highlighting in column A. User input is only required in the monthly columns - the user input for the annual columns need to be included on the Assumptions sheet in the first balance sheet section. All the rows on the cash flow statement which do not contain yellow highlighting contain formulas which automate the calculations of these items.

The input rows on the cash flow statement are all related to balance sheet items where the calculations on the balance sheet are based on adding the movement on the cash flow statement to the previous month's balance on the balance sheet. If you need more guidance on any of these items, refer to the appropriate section for the particular item under the Balance Sheet section of these instructions.

Note: The colour of the codes in column A on the cash flow statement indicate whether positive or negative values need to be entered in order to increase the appropriate balance sheet item's balance. If the code is green, positive input values increase the balance sheet balance and if the code is red, you need to enter negative values in order to increase the balance sheet balances.

Loan Amortization Tables (Loans1 to Loans3 & Leases sheets)

The template makes provision for including loans with up to four different sets of repayment terms in the cash flow projections. The amortization tables that are used to calculate the interest charges, loan repayments and outstanding balances have been included on the Loans1, Loans2, Loans3 and Leases sheets. The only user input that is required on these sheets is the additional loan amounts in column C.

Note: Refer to the instructions in the income statement - interest paid section and the balance sheet - non-current liabilities section for guidance on how these amortization tables have been compiled and where to include user input for each of these amortization tables.

• Management Template
• Planning Blog

Twelve month profit and loss projection excel template

• Posted by Hany Ismail, MSC, PMP
• Categories Management Template
• Date March 6, 2013
• Comments 1 comment

Introduction

This Twelve-Month Profit and Loss Projection Excel template is a valuable tool for businesses to forecast their financial performance over a year. It allows you to enter and analyze your sales, cost of goods sold (COGS), gross profit, operating expenses, and net profit, helping you make informed financial decisions. Here are instructions on how to use this template effectively:

Sales Projection

• Replace “category 1, category 2,” etc. labels with the actual names of your sales categories.
• Enter the projected sales for each category for each month in the corresponding cells.
• The spreadsheet will automatically calculate the total annual sales.
• In the “%” columns, you’ll see the percentage of total sales contributed by each category.

Cost of Goods Sold (COGS) Projection

• COGS represents expenses directly related to producing or buying your products or services, such as inventory purchases and labor costs.
• Analyze the elements of COGS for each sales category, including labor, materials, packing, shipping, and sales commissions.
• Enter the COGS for each category of sales for each month.
• The spreadsheet will calculate COGS as a percentage of sales dollars for each category in the “%” columns.

Gross Profit Projection

• Gross Profit is calculated as “Total Sales” minus “Total COGS”.
• In the “%” columns, you’ll see “Gross Profit” as a percentage of “Total Sales”.

Operating Expenses Projection

• Operating Expenses, also known as Overhead, include costs not directly related to production, such as rent, utilities, salaries, and interest.
• Customize the expense categories to match your business needs.
• You may need to combine some categories to fit within the 20-line limit of the spreadsheet.
• Most operating expenses remain relatively fixed, but some may vary with sales volume or seasonally.
• Enter your projected expenses for each month.
• The spreadsheet will display “Operating Expenses” as a percentage of “Total Sales” in the “%” columns.

Net Profit Projection

• Net Profit is calculated by subtracting “Total Operating Expenses” from “Gross Profit”.
• In the “%” columns, you’ll see “Net Profit” as a percentage of “Total Sales”.

Industry Averages

• The “IND. %” column is for comparing your cost factors to industry averages for businesses of your size and industry.
• You can obtain industry average data from industry associations, suppliers, libraries, or sources like “Statement Studies” by Robert Morris Associates.
• Industry averages can help identify areas where your expenses may deviate significantly from the norm.

This Twelve-Month Profit and Loss Projection Excel template is a valuable resource for businesses to protect their financial performance accurately. By meticulously entering your sales, COGS, and expenses, and comparing them to industry averages, you can make informed decisions to optimize your profitability and financial stability.

Download the PDF version of this Article to share with your colleagues

Twelve-month profit and loss projection excel template, keep in touch, join our email newsletters and receive free weekly useful content.

Tag: COGS , COST OF GOODS , Cost of Sales , excel template , Gross Profit , INDUSTRY AVERAGES , loss , NET PROFIT , Overhead , payroll taxes , profit , profit and loss , profit and loss projection , profit and loss projection excel template , projection

Hany Ismael is the founder and CEO of Planning Engineer Est. in Egypt. He has started his career back in 2003 as a site engineer, technical office engineer, planning engineer, planning manager, and finally planning department manager where he has been involved in several mega construction projects in Egypt and Saudi Arabia. In 2016, he established his own company in Egypt “Planning Engineer Est.” Hany gained his MSc degree in project management from Liverpool University-UK 2013-2016, PMP certified from PMI-USA 2010, and BSc Civil Engineer Tanta University-Egypt 2003. Hany provided more than 3,500 hours of planning and project management training on his website planningengineer.net, YouTube channel, and offline courses since 2011. He enjoys teaching project management in simple and practical way, and he developed several planning tools, techniques and courses.

Previous post

Cost Engineers: Who are they and what do they do?

How to get connected to planning engineer website, you may also like.

Method statement installation of Air handling units

Method Statement installation of Cable Trays and Ladders

Method Statement installation of PVC Conduits Concealed in Concrete Slab and Concrete Walls

Great template.

Leave A Reply Cancel reply

You must be logged in to post a comment.

Login with your site account

Remember Me

Not a member yet? Register now

Register a new account

 Join our Email Newsletter

I accept the Terms of Service

Are you a member? Login now

This site uses cookies to deliver and enhance the quality of its services and to analyze traffic.

Financial Projections_12 Months Template

Document description.

This financial projections_12 months template has 1 pages and is a MS Excel file type listed under our finance & accounting documents.

Sample of our financial projections_12 months template:

Indicates the future financial performance of a business for a period of twelve months.

Related documents

3,000+ templates & tools to help you start, run & grow your business, all the templates you need to plan, start, organize, manage, finance & grow your business, in one place., templates and tools to manage every aspect of your business., 8 business management modules, in 1 place., document types included.

Financial modeling spreadsheets and templates in Excel & Google Sheets

• Your cart is empty.

Mastering the Art of Financial Projections 12 Months Template – Excel: A Closer Look

A Financial Projections 12 Months Template in Excel provides a detailed roadmap for predicting a company’s financial performance. This customizable tool aids in strategizing and decision-making for future business investments.

Creating an effective financial forecast is crucial for businesses eager to navigate the uncertainty of fiscal outcomes. Excel’s 12-Month Financial Projections Template emerges as an indispensable asset for entrepreneurs and finance professionals alike. This comprehensive template allows users to input various financial assumptions and calculates anticipated revenue, expenses, cash flow, and other vital financial metrics over a yearly quarter.

Designed to be both user-friendly and adaptable, it caters to a multitude of industries and business sizes. Its systematic approach enables a clear visualization of financial trajectories, assisting in securing investments, managing budgets, and preparing for upcoming fiscal challenges. The template’s precision and adaptability make it a cornerstone for prudent financial planning and management.

The Importance Of Financial Projections

Crafting financial projections gives companies an essential foresight into their future. This blueprint lays the financial path for the upcoming months. A 12 Months Financial Projection Template in Excel simplifies this task. It shines a light on potential revenues and costs. It helps steer the business towards stability and growth with data-driven confidence.

Key Benefits For Businesses

A clear financial forecast is not just a number-crunching exercise. It impacts every facet of a business. Here are the benefits outlined:

• Reduces risk : Anticipates financial shortfalls and surpluses.
• Attracts investors : Shows a credible financial future.
• Manages cash flow : Helps in strategic expenditure and investment.
• Assists in loan applications : Enhances approval chances with concrete numbers.
• Guides decision making : Provides a framework for informed choices.

Strategic Planning And Growth

Effective planning defines success. The financial projections template serves as an indispensable tool. Companies map out expansion and scalability with precision.

Long-term objectives are broken into manageable targets. This roadmap is vital for every stakeholder. It aligns efforts towards a common goal. Here’s how it propels growth:

• Highlights opportunities for scaling up operations .
• Identifies cost-saving measures .
• Enables goal tracking and performance assessment.
• Foresees market trends and prepares for change .

Foundations Of A Solid Financial Projection

Understanding the foundations of a solid financial projection shapes a reliable future for your business. A robust financial projection provides a clear vision. It guides decisions and attracts investors. To master the art of financial projections, especially for a 12-month period using an Excel template, we must start at the core.

Essential Components

To build a solid foundation, every financial projection needs key elements. These components give shape to financial expectations. They support informed decisions. The essential components include:

• Sales Forecast: Estimate future sales to set achievable goals.
• Expense Budget: Tools to manage costs effectively.
• Cash Flow Statement: Tracks liquidity and ensures healthy operations.
• Income Statements: Shows profitability over the months.
• Balance Sheet: Reveals the financial position clearly.

Accuracy And Realism

Making financial projections accurate and realistic is vital. They should mirror the real potential of the business. To achieve precision:

• Use historical data as a benchmark .
• Embed market research to stay relevant.
• Maintain conservative estimates to remain pragmatic.
• Update regularly to reflect changes.

Through these steps, projections remain grounded. They act as reliable indicators for the business roadmap.

Choosing The Right Template

Choosing the right template for financial forecasting is a crucial start. The template should be easy to use and align with your specific financial goals. Picking the perfect one ensures your 12-month projections are both accurate and efficient. Let’s take a closer look at how Excel can serve as a robust tool for this planning.

Excel As A Tool For Financial Planning

Microsoft Excel stands as a pillar for financial tasks. It’s versatile, widely available, and packed with features to aid in crafting detailed financial projections. Users benefit from Excel’s formulas, pivot tables, and chart-making capabilities. This makes it a top choice for financial planners and businesses worldwide.

Criteria For Template Selection

Not all templates are equal, so it’s essential to understand the criteria that guide your selection:

• User-Friendly Interface: It shouldn’t require advanced Excel skills.
• Customization: The template must be adaptable to your unique needs.
• Built-in Formulas: These save time and reduce errors.
• Scalability: The template should grow with your business.
• Compatibility: It should work well with other systems you use.
• Instructions: Guidance on how to use the template effectively.

Select a template that meets these criteria to help ensure success in your financial planning efforts.

12-months Projection: A Deep Dive

Welcome to the essential journey through 12-month financial projections, crafted meticulously in Excel. Delve into an experience that transforms numbers into a clear path forward for your business.

Monthly Vs. Quarterly Projections

Grasping the timeline for financial forecasting can unlock potent insights. Two popular mapping methods stand out: monthly and quarterly projections. Let’s explore each one.

• Monthly Projections: Offer fine-grained details of cash flow and expenses. Ideal for startups and fast-moving sectors.
• Quarterly Projections: Provide a broader view, suitable for established businesses with stable revenue patterns.

Monthly projections shine in real-time decision-making. They track the ebb and flow of business rhythms. However, quarterly projections ease the burden of constant updating, fitting well for mature companies.

Adapting To Your Business Cycle

Your business cycle is unique. It demands a tailored approach to financial projection. Aligning the forecasting pattern with your cycle is key.

High season calls for close monitoring – a monthly glance fits. Quiet periods might favor the stretched-out, quarterly check-ins. Know your business, choose wisely.

• Identify peak and low seasons within the business.
• Align the projection frequency with these cycles.
• Adjust projections as cycles shift over time.

Each business sings a different fiscal tune. Matching the rhythm of projections to this tune is crucial for harmony. It ensures accurate, actionable insights.

Inputting Your Data

Inputting Your Data into a financial projections template is a critical step. You need your numbers to be accurate. They tell the story of your business’s potential. Let’s dive into how you can fill in your 12-month financial projection template with confidence.

Starting With Historical Data

Grab your past financial statements. They hold the key to a realistic forecast. Use the following guide:

• Revenue: Fill in your past monthly sales.
• Costs: Add up what you spent to make that money.
• Profits: See what was left after paying bills.

By looking at past numbers, you set a foundation. It makes your future predictions stronger.

Estimating Future Performance

Predicting the future feels tough. But you can make educated guesses. Here’s a simple approach:

• Review market trends. What’s happening in your industry?
• Consider new products or services you’re launching.
• Apply growth rates based on past increases or goals.

Using a growth multiplier is smart. Say you’ve grown 10% yearly. Apply that to your future months. Adjust for any major changes you expect.

Remember, your template is a tool. It helps you plan and adjust as you grow. Regular updates keep it useful .

Reading The Numbers

Mastering the Art of Financial Projections is crucial for any business success. A clear understanding of the 12-month financial template in Excel offers insights into your business’s future. Let’s delve into the key component: Reading the Numbers . Knowing what the numbers say can guide decisions, predict cash flow, and project profitability.

Analyzing Cash Flow

To keep your business thriving, you need positive cash flow. The cash flow section in your template tells a story of money entering and leaving your business.

• Income Sources: Include sales, loans, investments, and other cash inflows.
• Outgoing Expenses: All operational expenses, like rent, wages, and utility bills.
• Net Cash Flow: Found by subtracting total outflows from inflows.
• Cash on Hand: This is the opening balance plus net cash flow.

Analyze these numbers to ensure you avoid cash shortages and can invest in growth opportunities.

Interpreting Profit And Loss

Your Profit and Loss statement is like a health check for your business. It shows if your business model is working.

Review this statement to track profitability and spot trends. It tells whether your revenues outweigh your expenses over time.

Common Pitfalls And How To Avoid Them

Mastering financial projections is critical for any business’s strategy. A 12-month Excel template is a powerful tool—but only if used correctly. Mistakes in this area can be costly. Let’s explore common stumbling blocks and smart strategies to steer clear of them.

Overoptimistic Estimates

Bold forecasts may feel motivating, but they can risk your business’s future. Let’s avoid this trap:

• Review past data : Use historical performance as a reality check for your projections.
• Industry benchmarks: Compare your estimates with industry averages.
• Third-party feedback: Get an outsider’s perspective to validate your projections.
• Scenario analysis: Prepare for best, expected, and worst-case scenarios.

Ignoring Market Trends

Many planners overlook crucial market shifts. Maintain relevance and accuracy:

• Continuous research: Stay updated with market developments.
• Client feedback: Their inputs can alert you to emerging patterns.
• Competitor analysis: Monitor your competition’s movements closely.
• Flexibility in projections: Adapt your plans with market changes.

Regular Review And Adjustments

Mastering financial projections is like steering a ship through ever-changing seas. Regular reviews and adjustments to your 12-month financial projection template in Excel ensure you stay on course. This practice aligns your business goals with real-world outcomes, providing a clear view of your financial journey.

The Value Of Monthly Reviews

Consistent monthly reviews of your financial model bring several benefits:

• Spot trends early: Understand your financial health and anticipate changes.
• Stay accountable: Keep your business accountable to its financial targets.
• Minimize risks: Identify risks before they become larger issues.

By reviewing every month, you ensure accuracy and adaptability in your financial outlook.

Making Data-driven Decisions

Using your monthly financial reviews, you can:

• Analyze performance data against projections.
• Make informed decisions to drive your business forward.
• Adjust strategies based on real-time financial insights.

Data-driven decisions help tailor your strategies to meet actual business needs, leading to sustainable growth .

Leveraging Projections For Funding

Leveraging Projections for Funding is crucial when stepping into the business arena. A thorough 12-month financial projections template can set the groundwork. It convinces stakeholders of your business’s potential for success. Let’s dive into how a detailed Excel projection can become your ally in securing funds.

Convincing Investors

When you pitch to investors, your financial projections are a manifesto of your business acumen. Your Excel template should translate numbers into stories. Stories that tell of growth, scalability, and profitability. Here are key points to cover:

• Revenue forecasts that show realistic, but ambitious growth.
• Expense budgets demonstrating fiscal responsibility.
• Cash flow projections indicating the business’s health over time.

Present data with confidence. Use clear visuals like charts and graphs. They make complex data easy to understand.

Loan Application Strategies

To secure a loan, your Excel projections should accomplish two things. Firstly, show your ability to repay. Secondly, highlight how the loan fuels growth. Align these strategies with your loan application:

Your goal is to establish trust. Do this by showcasing informed planning and risk management.

Tools And Resources For Enhancing Projections

Making accurate financial projections is a vital part of business planning. With the right tools and resources, creating an effective 12-month financial projection template in Excel becomes much simpler. Let’s explore the features and integrations that can take these projections to the next level.

Advanced Excel Features

Excel is a powerhouse for financial analysis. Master these features:

• Data Validation: Ensure accuracy in data entry.
• PivotTables: Summarize large data sets quickly.
• Conditional Formatting: Highlight key figures easily.
• What-If Analysis: Model different financial scenarios.

Utilize formulas like VLOOKUP and INDEX-MATCH for data retrieval and SUMIF for conditional sums. Understand financial functions like NPV and IRR for investment analysis.

Integrating With Other Software

Combine Excel with other software for more power. Here’s how:

Consider add-ins and APIs to automate data flows. Power Query fetches live data for real-time insights. VBA macros automate repetitive tasks, and external database connections allow for dynamic data referencing.

Case Studies: Successes And Failures

Embarking on the quest for robust financial projections can be daunting. Yet, with a detailed 12-month Excel template, the journey becomes a tale of strategic triumphs and cautionary tales. Let’s dive into real-world case studies that reveal the secrets behind creating successful financial forecasts and the pitfalls that can trip up even the most diligent planners.

Lessons Learned

Each financial forecast story teaches critical lessons. Successes spotlight what to emulate, while failures cast a light on what to avoid.

• Accuracy is crucial; small errors can snowball into financial mishaps.
• Regular review cycles ensure projections evolve with your business.
• Overreliance on optimistic scenarios sets the stage for shortfalls.

An investigation into failed forecasts often reveals a lack of data validation and an overestimation of the market’s readiness. Conversely, success stories boast the integration of realistic market data and conservative growth assumptions.

Best Practices Revealed

Thriving case studies shed light on best practices for financial forecasting using a 12-month Excel template.

Implement detailed revenue drivers rather than simple percentage growth. Perform sensitivity analyses to understand potential volatility. Successful plans use easy-to-update templates that adapt as new data comes to light.

Continued Learning And Expert Advice

Excel is not just a tool; it’s a gateway to mastering financial foresight. To fully harness its power for financial projections, ongoing education is crucial. This journey involves dynamic learning opportunities and tapping into expert wisdom.

Workshops And Webinars

Interactive workshops and webinars offer hands-on experiences. These sessions bring Excel tricks and financial modeling techniques to life. Participants gain insights from real-life scenarios and case studies. They interact with industry experts and peers, enhancing their comprehension and application skills.

• Live demonstrations explain complicated functions in simple steps.
• Q&A sessions address individual queries.
• Workshops often provide downloadable resources for practice.

Consulting Financial Experts

Seeking advice from seasoned financial experts bridges gaps in knowledge and skills. These professionals can review projections, suggest improvements, and provide customized advice.

• Personalized feedback sharpens forecasting accuracy.
• One-on-one sessions tailor guidance to specific needs.
• Ongoing support ensures steady progress and confidence.

Frequently Asked Questions

What is a financial projection template.

A financial projection template is a tool enabling business owners to forecast future revenues, expenses, and cash flow. It helps in planning and decision-making for upcoming financial periods, usually over a year.

Why Use An Excel Template For Financial Projections?

Excel templates provide a familiar, flexible environment for financial modeling. They offer built-in formulas and formatting options to accurately create and adjust financial forecasts tailored to business needs.

How To Create A 12-month Financial Projection?

Creating a 12-month financial projection involves inputting estimated revenues and expenses into each month. Adjust figures based on market analysis, historical data, and growth assumptions to project future financial performance.

What Are The Benefits Of Financial Projections?

Financial projections are vital for strategic planning, securing investments, and managing cash flow. They help anticipate financial needs and allocate resources efficiently to ensure business sustainability and growth.

Navigating the financial future of your business just got easier with this comprehensive 12-month Excel projection template. By leveraging such a precise tool, you can plan with confidence and clarity. Embrace the peace of mind that comes from preparedness and start charting a successful financial course today.

Solar Energy Financial Model

The Solar Energy Financial Model Excel template forecasts the expected financials for a Solar Park project and calculates the relevant project metrics... read more

•   PDF Demos  –  $0.00 Version 5.2
•   Starter Excel Model  –  $59.95 Version 5.2
•   Basic Excel Model  –  $69.95 Version 5.2
•   Pro Excel Model  –  $99.95 Version 5.2
•   Premium Excel Model (including PPT Template)  –  $149.95 Version 5.2

Financial Model for Mobile App | Mobile App Business Plan

The Mobile App Financial Plan Template in Excel allows you to develop financial projections when launching a new business centered around an app insta... read more

•   PREMIUM  –  $209.95 Version 7.3
•   PRO  –  $159.95 Version 7.3
•   BASIC  –  $109.95 Version 7.3
•   PDF Demo Versions  –  $0.00 Version 7.3

Private Equity Fund Model (Investor Cashflows)

Private Equity Financial Model to analyze fund cashflows and returns available to Limited Partners (Investors) and General Partner (Investment Manager... read more

•   PDF Demo version  –  $0.00 Version 1
•   American Waterfall  –  $155.00 Version 2
•   European Waterfall  –  $115.00 Version 2

Hotel Investment Financial Model

The Hotel Investment Financial Model provides a framework to forecast the expected cash flows for a hotel investment and calculates the relevant inves... read more

•   FULL Version (Excel)  –  $34.95
•   FREE Version (PDF)  –  $0.00

Coffee Shop Financial Model Excel Template

Download Coffee Shop Financial Model Template. Allows you to start planning with no fuss and maximum of help Highly versatile and user-fri... read more

•   Excel - Multi-User  –  $129.00 Version 1
•   Excel - Single-User  –  $99.00 Version 1
•   Free Demo  –  $0.00 Version 1

Pharma Biotech Valuation Model Template (Risk-Adjusted)

The Pharma Biotech Valuation Model Template calculates the risk-adjusted DCF Value of a Pharma or Biotech Startup Company with several products under ... read more

•   Full Excel Model - PREMIUM  –  $199.95 Version 2.2
•   Full Excel Model - BASIC  –  $149.95 Version 2.2
•   PDF Demo Previews  –  $0.00 Version 2.2

SaaS Business Financial Model

The SaaS Business financial model offers valuable assistance in preparing a budget and multi-year financial plan for a Software as a Service (SaaS) bu... read more

•   Premium Excel Model  –  $199.95 Version 8.1
•   Pro Excel Model  –  $149.95 Version 8.1
•   Basic Excel Model  –  $99.95 Version 8.1
•   PDF Demo  –  $0.00 Version 8.1

Discounted Cash Flow Valuation Model: Free Excel Template

This Discounted Cash Flow (DCF) valuation calculator template projects a three-statement model that allows users to value a company based on the net p... read more

•   Basic Version  –  $0.00 Version 4.4
•   Advance Version  –  $0.00 Version 4.4

Commercial Real Estate Valuation Model Template

A commercial real estate valuation model template assists in running a professional DCF Valuation for a commercial property such as an office building... read more

•   PDF Demo Versions  –  $0.00 Version 1
•   BASIC Excel Model Template  –  $59.00 Version 1
•   PRO Excel Model Template  –  $99.00 Version 1
•   PREMIUM Excel MODEL + Report Template  –  $199.00 Version 1

Private School Financial Model

This is a financial model template for a new private school startup business. The Excel model allows forecasting the cash flows over the next 10 years... read more

•   Excel Model  –  $44.95 Version 9.1
•   PDF Demo  –  $0.00 Version 9.0

Upstream Oil & Gas Project Analysis

The Upstream Oil & Gas Project Financial Model Template in Excel empowers you to project and dissect your impending Oil and Gas drilling ventures. Pre... read more

•   Pro - Full Excel Model  –  $159.95 Version 8.3
•   Basic - Full Excel Model  –  $119.95 Version 8.3
•   PDF Demo Versions  –  $0.00 Version 8.3

Manufacturing Company Financial Model

The Manufacturing Financial Model provides a framework to accurately forecast the financial statements of a manufacturing company over the next 10 yea... read more

•   Excel Model  –  $44.95 Version 4
•   PDF Demo  –  $0.00 Version 4

Hotel Financial Model Excel Template

Download Hotel Financial Model. Creates a financial summary formatted for your Pitch Deck. Ready to Raise Capital. The hotel excel financial... read more

Wind Energy Farm Financial Model

The Wind Energy Financial Model forecasts the expected financials for a Wind Park project and calculates the project's IRR and NPV.

•   PDF Demo - Basic  –  $0.00 Version 3
•   PDF Demo - Pro  –  $0.00 Version 3
•   Full Excel Model - Basic  –  $64.95 Version 3
•   Full Excel Model - Pro  –  $79.95 Version 3

Three Statement Model

The three statement model provides a simple template in Excel to forecast the three financial statements over the next 5 years: Income Statement, Bala... read more

Grocery Store Financial Model Excel Template

Try Grocery Store Financial Projection. Creates 5-year Pro-forma financial statements, and financial ratios in GAAP or IFRS formats on the f... read more

Waterfall Profit Distribution Model (up to 4 Tiers)

We are introducing our 4-Tier Waterfall Profit Distribution Model. The waterfall profit distribution model template aims to support a thorough analysi... read more

•   Full Excel Model  –  $79.95 Version 2.1
•   PDF Demo  –  $0.00 Version 2.1

Advanced Financial Model with DCF & Valuation

Dynamic Financial Planning & Analysis Model providing up to 10 Years of Financial Projections.

•   Excel Financial Model  –  $129.00 Version 1
•   PDF Free Demo  –  $0.00 Version 1

Gasoline and EV Charging Station Financial Model

Investors can assess the viability of setting up and investing in gasoline stations with a charging station by downloading a financial model for their... read more

•   Premium Excel Version  –  $129.95 Version 2.1
•   Basic Excel Version  –  $99.95 Version 2.1
•   PDF Versions  –  $0.00 Version 2.1

Airbnb Financial Model

Air BnB Financial Model Template presents the business case of the purchase of up to 5 properties with the intent of utilizing them as short term rent... read more

•   Excel Model  –  $119.00 Version 1
•   Free PDF  –  $0.00 Version 1

Simple Cap Table Template – Free Download

This is a simple capitalization (cap) table template which allows entrepreneurs to understand the dilution effect of capital raisings and a simple sto... read more

Fitness Center 10 Year Financial Model

Key logic designed to forecast cash flow up to 10 years for a fitness center that has recurring monthly fees. Fully integrated 3-statement model, cap ... read more

Lending Platform Financial Model (LaaS)

Includes all the assumptions you need to project the gross revenues and profits of a LaaS platform (Lending as a Service). 3-statement model and cap t... read more

•   Excel Model  –  $75.00 Version 3

Green Hydrogen (Simple Electrolysis Financial Model)

The Model Incorporates data provided by different available sources to Model an Electrolysis financial model. It includes Electrolyzer cost, Dispenser... read more

•   Excel Template  –  $150.00 Version 1
•   Free Version  –  $0.00 Version 1

Outpatient Clinic Financial Model Excel Template

Shop Outpatient Clinic Financial Model Template. Enhance your pitches and impress potential investors with the expected financial metrics. A sop... read more

•   Excel - Multi-User  –  $129.00
•   Excel - Single-User  –  $99.00
•   Free Demo  –  $0.00

Gold Mine Investment Model

The Gold Mine Investment Model is used to determine the financial feasibility of a proposed Gold Mine Investment. The Financial Model outputs IRR and ... read more

•   Excel Financial Model  –  $44.95 Version 6.2
•   PDF Demo  –  $0.00 Version 6.2

Beverage Manufacturing Start-up Financial Model

The beverage manufacturing industry is a dynamic and rapidly growing sector that caters to a diverse market ranging from soft drinks and juices to alc... read more

•   Excel Model  –  $199.95 Version 5.2
•   PDF Demo  –  $0.00 Version 5.2

All My Financial Models, Spreadsheets, Templates, and Tools: 120+

Lifetime access to all future templates as well! Here is a set of spreadsheets that have some of the most valuable logic in the world. I have been thr... read more

•   All My Excel Tools  –  $999.00 Version 1

Bakery Financial Model Excel Template

Shop Bakery Budget Template. Solid package of print-ready reports, including P&L and cash flow statements, and a complete set of financial r... read more

Cafe Financial Model Excel Template

Check Our Cafe Budget Template. Creates a financial summary formatted for your Pitch Deck. Ready to Raise Capital. Creates 5-year cafe financial model... read more

Authority Matrix Template

Authorities and Responsibilities Matrices are considered important to organizations due to their role in identifying and documenting decisions that ar... read more

•   Excel Version  –  $35.00
•   PPT Version  –  $0.00

Biogas Financial Model

The Biogas Financial Model forecasts the expected financials for a Biogas plant project and calculates the IRR and NPV values for the project.

•   FREE PDF  –  $0.00 Version 1
•   Excel Model  –  $39.95 Version 2

Airport Operator Financial Model

Airport Operator Financial Model presents the business case of an already operating airport (with planned refurbishments) and an investment in a new t... read more

•   Excel Model  –  $119.00
•   Free PDF  –  $0.00

Due Diligence P&L – Exhaustive Revenue and Costs Analysis Template

Model for in depth understanding of high level profit and loss and revenue analysis. Big-4 like checklist of due diligence analyses. This Financial Du... read more

Rental Property Financial Model

The rental property financial model calculates the homeowner's IRR and long it takes to repay a mortgage when the property is rented. The financial... read more

Hair Salon Financial Plan | Beauty Salon Business Plan

Plan out the financial plan your hair or beauty salon. The beauty & hair salon business plan goes up to 10 years and has plenty of granularity.

Online Clothing Store Financial Model Excel Template

Impress bankers and investors with a proven, solid Online Clothing Store Financial Projection Template. Five year online clothing store cash... read more

Startup Company Financial Model – 5 Year Financial Forecast

Highly-sophisticated and user-friendly financial model for Startup Companies providing a 5-Year advanced financial forecast.

•   Financial Model - Light Version  –  $119.00 Version 1
•   Financial Model - Standard Version  –  $159.00 Version 1
•   Financial Model - Premium Version  –  $219.00 Version 1

Financial model for FMCG

The FMCG Financial Model provides a framework to accurately forecast the financial statements of a FMCG company over the next 8 years. The model uses ... read more

•   PDF Demo Version  –  $0.00
•   Excel Model  –  $25.00

Clothing Store Financial Model Excel Template

Get Your Clothing Store Budget Template. Creates 5-year Pro-forma financial statements, and financial ratios in GAAP or IFRS formats on the fly. Five-... read more

IRR Project Finance Analysis

The IRR Project Finance Analysis forecasts the expected financials for a greenfield project and calculates the levered and unlevered Internal Rate of ... read more

Hotel Valuation Financial Model

The Hotel Valuation Financial Model provides a simple way to forecast the expected cash flows for a hotel investment and calculates the relevant inves... read more

•   Excel Model  –  $44.95 Version 6.1
•   PDF Demo  –  $0.00 Version 6.1

Consolidated Financial Statements

The purpose of this model is to provide a simple way to see the financial statements for many companies in i file

•   Excel Version  –  $30.00 Version 2
•   Free Version  –  $0.00 Version 2

NPV, IRR, & Payback Calculator

The template allows the user to calculate the net present value (NPV), internal rate of return (IRR) and payback period from simple cash flow stream w... read more

•   5 Yr Excel Version  –  $0.00 Version 1
•   10 Yr Excel Version  –  $0.00 Version 1

Start Up Car Park Excel Model and Valuation

This detailed, yet easy to use three statement financial model will allow you to calculate your business' profit and loss, build a balance sheet and c... read more

•   Paid Excel Model  –  $69.00

Green Hydrogen (Electrolysis) Production Financial Model

This green hydrogen financial model template builds a multi-year financial plan to analyze the financial feasibility and profitability for the product... read more

•   Full Excel Version  –  $119.00 Version 1.7
•   PDF Version  –  $0.00 Version 1.7

Waste to Energy Financial Model

The purpose of this financial model is to evaluate the financial feasibility of a waste to energy project such as e.g. a landfill gas plant. The model... read more

•   Excel FULL Version  –  $35.00
•   PDF Version  –  $0.00

Dental Practice Financial Model Excel Template

Check Dental Practice Financial Model. Fortunately, you can solve Cash Flow shortfalls with a bit of effort. A sophisticated 5 year dental p... read more

Real Estate Developer Model

This financial model can be used to evaluate the financial feasibility of a real estate development project and present it in investor grade quality t... read more

•   Excel Model  –  $49.95 Version 1.1
•   PDF Demo Version  –  $0.00 Version 1.1

Hospital Financial Model

Simply open the file in Excel

•   Full Version  –  $34.95
•   Free Version  –  $0.00

Leave a Reply Cancel reply

You must be logged in to post a comment.

12-Month Profit and Loss Projection Template

Every company, big or small, has aspirations of success. How do you measure the success of a business? Usually, by the profit it makes. The 12-Month Profit and Loss Projection Template will help you analyze the value of your business, employees, service, or even just one product by comparing it with the initial cost and sales revenue. It can be difficult to track multiple items at once, but this template makes it easy to enter the information and receive insight into the success or failure of any endeavor you want to undertake. Click the link below to get started on your free template download.

12-Month Profit and Loss Projection Template Guide

The first step is to go through and change the sections marked “category 1, category 2”, etc. These should actually be labels to specific sales categories or specific products. After you’ve done that, enter the sales for each category for your current month. The spreadsheet will add up total annual sales. In the “%” columns, the spreadsheet will also show the percent of total sales contributed by each category.

Next, you need to decide which of these items have been the most profitable, and which have been the least, and then reflect on why these categories are performing this way. In the “%” columns, the spreadsheet will show the cost of gross sales as a % for that category.

After you have entered the above information, the template will calculate the Gross Profit (total sales minus total cost of gross sales.

Overhead is another major element of any business and is covered in the expenses category. Remember, at any time you can change the pre-written text to items that are more commonly used in your business.

The net profit will be the total amount you have at the end of all your expenses and revenue from your business. The spreadsheet will subtract Total Operating Expenses from Gross Profit to calculate Net Profit. In the “%” columns, it will show Net Profit as a % of Total Sales.

You always want to stay in the know when it comes to your market. The “IND %” column, you can enter the averages for all the businesses in a similar market and size as your own to compare your profits with theirs. This is a handy tool to compare the ending total with other companies.

Stay on top of your company’s profit and loss margins by downloading the 12-Month Profit and Loss Projection Template today.

Download:  12-Month Profit and Loss Projection Template

Not what you were looking for? Search again!

Leave a reply.

Your email address will not be published. Required fields are marked *

• All Self-Study Programs
• Premium Package
• Basic Package
• Private Equity Masterclass
• VC Term Sheets & Cap Tables
• Sell-Side Equity Research (ERC © )
• Buy-Side Financial Modeling
• Real Estate Financial Modeling
• REIT Modeling
• FP&A Modeling (CFPAM ™ )
• Project Finance Modeling
• Bank & FIG Modeling
• Oil & Gas Modeling
• Biotech Sum of the Parts Valuation
• The Impact of Tax Reform on Financial Modeling
• Corporate Restructuring
• The 13-Week Cash Flow Model
• Accounting Crash Course
• Advanced Accounting
• Crash Course in Bonds
• Analyzing Financial Reports
• Interpreting Non-GAAP Reports
• Fixed Income Markets (FIMC © )
• Equities Markets Certification (EMC © )
• ESG Investing
• Excel Crash Course
• PowerPoint Crash Course
• Ultimate Excel VBA Course
• Investment Banking "Soft Skills"
• Networking & Behavioral Interview
• 1000 Investment Banking Interview Questions
• Virtual Boot Camps
• 1:1 Coaching
• Corporate Training
• University Training
• Free Content
• Support/Contact Us
• About Wall Street Prep
• Financial Modeling

Monthly Cash Flow Forecast Model

Step-by-Step Guide to Understanding How to Build a Monthly Cash Flow Forecast Model

Learn Online Now

What is a Monthly Cash Flow Forecast Model?

The Monthly Cash Flow Forecast Model is a tool for companies to track operating performance in real time and for internal comparisons between projected cash flows and actual results.

While 12-month forecast models attempt to project the future, a significant amount of benefits can be obtained from a monthly variance analysis, which quantifies how accurate (or inaccurate) management estimates were in the form of a percentage.

Table of Contents

Monthly Cash Flow Forecast Model Importance

Monthly cash forecast models vs financial statements, forecasting monthly cash flows, variance analysis, monthly cash flow forecast – excel template, monthly cash flow forecast model assumptions, monthly cash flow forecast model example.

A company’s ability to produce positive cash flows over the long run determines its success (or failure).

The cash flows of a company – in its simplest form – refers to the cash that comes into and out of the company.

Monthly forecasts establish limits on a company’s spending based on income and retained earnings .

The chart below lists some common cash flow drivers :

Under accrual accounting , public companies must submit filings with the SEC each quarter ( 10Q ) and at the end of their fiscal year ( 10K ).

On the other hand, monthly forecast models are internal tools often used by FP&A professionals or owners of small businesses.

While large, publicly-traded companies will certainly have their own set of internal models updated constantly on a daily (or weekly) basis, our post will focus on providing a basic overview of monthly cash flow models.

Cash-Based Accounting vs Accrual Accounting

One distinction between monthly cash flow forecasts and the financial statements filed by public companies is that the former typically abides by cash accounting.

Using cash-based accounting tends to be more common for smaller, private companies, which have far less sophistication in their business models, financing structures, etc.

• Cash-Based Accounting: Under cash accounting, recognition of revenues and expenses occurs once cash is received or physically transferred, regardless of whether the product or service was delivered to the customer.
• Accrual Accounting: For accrual accounting, “earned” revenue (i.e. the associated product/service has been delivered) and the coinciding expenses are recognized in the same period (i.e. the matching principle).

The Wharton Online and Wall Street Prep Financial Planning & Analysis (FP&A) Certificate Program

Elevate your finance career with Wharton's globally recognized FP&A Certificate Program. Enrollment is open for the Sep. 9 - Nov. 10 cohort.

The first step to creating a monthly cash flow forecast model is to project your company’s future revenue and expenses. Note that the model assumptions driving the forecast must be based on valid reasoning to justify the projection.

Examples of Cash Flow Drivers Average Revenue Per User (ARPU) Average Order Value (AOV) Average Sale Price (ASP) Average Number of Items Per Order

The more existing historical data there is to confirm the validity of the assumptions, the more reliable the forecast becomes.

Early-stage investors usually take the forecasted monthly financials and market sizing estimates of seed-stage start-ups with a grain of salt.

But at the same time, monthly cash flow forecast models are not meant to manage urgent liquidity requirements, as is the case for the thirteen-week cash flow model (TWCF) used in the restructuring of distressed companies.

Once the 12-month projections are complete, updates to the existing model are continuously made as new financial data rolls in and are collected internally.

Variance analysis is the difference between two metrics:

• Expected Performance
• Actual Performance

The management team of a company should strive to minimize the difference between expected and actual performance, especially as they gain more experience and knowledge of the industry, competition, etc.

Improving the accuracy of cash projections year-over-year is a sign that management is developing a better understanding of operating their company, although there are inevitable circumstances when unexpected events can change a company’s trajectory.

Comparing past projections to actual operating results can improve the accuracy of future projections, especially if management can spot long-term trends and recurring patterns.

Through experience, management can better determine factors that contribute toward outperformance, performance in line with expectations, or underperformance.

Favorable variance refers to when actual performance came in better than originally projected – similar to a positive “earnings surprise”.

But in the case of negative variance, the actual performance was underwhelming and came in below management expectations, similar to a public company missing an earnings per share (EPS) target.

“Rolling” Cash Flow Forecasts

Once the monthly cash flow forecast (and the variance analysis) is complete, the recommended next step is to aggregate the monthly data into an annualized section.

Companies can then assess the current year from a high level, as well as create multi-year projections with the compiled data sets – a long-term process that starts with monthly financial models.

We’ll now move to a modeling exercise, which you can access by filling out the form below.

By submitting this form, you consent to receive email from Wall Street Prep and agree to our terms of use and privacy policy.

For our monthly cash flow model, we’ll be creating a 12-month forecast model for a small business (SMB).

Coming up with the operating assumptions, which is the most time-consuming portion of the analysis, will not be part of our exercise.

In reality, the numbers input for the “Expected” column would be linked from a granular model that accounts for customer cohorts, pricing plans, customer pipelines, and more.

If that were the case, the figures listed under the “Expected” column would be in black font color, as opposed to blue, to reflect the fact that they’re linkages to another tab within the model.

Since building a comprehensive model and then defending each assumption is not realistic for a simplistic modeling exercise like ours, we’ll instead hardcode each projected figure.

But first, we need to set up the monthly structure for our model, which we’ll accomplish using “=MONTH(1)” for January, and then “=EOMONTH(Prior Cell,1) for each subsequent month until we reach December.

For each month, we’ll split up the financials between two columns titled:

The model assumptions for the forecasted performance have been listed in the following sections:

Monthly Expected Cash Receipts

• Cash Revenue: $125,000 Per Month
• Accounts Receivables (A/R) Collection: $45,000 Per Month
• Interest Income: $10,000 Per Month

The concept of revenues and cash receipts is similar, but revenues are recorded on the income statement under accrual accounting reporting standards while cash receipts are based on cash-based accounting.

Cash receipts directly increase the total cash amount recorded on the balance sheet, but revenue can be earned but recognized as accounts receivable (A/R) instead of as “revenue” on the income statement, for example.

Monthly Expected Cash Disbursements

• Inventory Purchase: $40,000 Per Month
• Capital Expenditures (CapEx): $10,000 Per Month
• Employee Wages: $25,000 Per Month
• Marketing Costs: $8,000 Per Month
• Office Rent: $5,000 Per Month
• Utilities: $2,000 Per Month
• Income Taxes: $85,000 @ Quarter End (4x Per Year)

Tying all of the assumptions together, total cash receipts are expected to be $180,000 each month.

As for cash disbursements, the expected monthly expenses are $90,000. However, in the months when taxes are due, cash expenses increase to $175,000. Note that even for small businesses, this sort of tax treatment is a simplification and is NOT meant to reflect reality by any means (i.e. different rules by jurisdiction, local/regional taxes, real estate taxes, etc.).

Next, we’ll populate the columns titled “Actual” with the assumptions shown below.

For cash receipts, expected performance was understated by $16,000 each month ($196,000 vs. $180,000).

Conversely, the cash disbursements were also understated – but in the case of expenses – higher values have a negative impact on cash flow and reduce profitability .

In non-tax paying months, expenses were $105,800 each month when the projected amount was $90,000, which comes out to a difference of $15,800.

And for the tax-paying months, monthly expenses are $190,800, versus expectations of $175,000.

The “Net Change in Cash” is calculated at the bottom by adding the “Total Cash Receipts” to the “Total Cash Disbursements”.

• Expected Net Change in Cash (Non-Tax Months): $90,000
• Actual Net Change in Cash (Non-Tax Months): $90,200

For the months in which taxes are paid:

• Expected Net Change in Cash (Tax Months): $5,000
• Actual Net Change in Cash (Tax Months): $5,200

The monthly variance across the entire forecast is $200, which reflects a very accurate estimation given the minimal difference between the expected and actual performance.

As a recommended modeling best practice, we’ve calculated the totals for the Year 2022, for which we use the “SUMIF” Excel function to add the relevant figures.

Monthly ➞ Annual Excel Formula “=SUMIF (Range of Expected and Actual Columns, “Expected” or “Actual” Criteria, Range of Values to SUM)”

Here, we can see the summarized sources of the variations, as well as the offsetting factors.

For instance, cash revenues were understated by 20%, A/R collection was overstated by 20%, and there were no surprises in the amount of interest income received (i.e. fixed income ).

Regarding the cash outflows, the higher disbursements directly connected to higher revenue generation (i.e. variable costs ) like inventory purchases, CapEx , and employee wages, which were 20% higher than anticipated.

Marketing expenses were relatively aligned with management expectations and were 10% higher than the original forecast.

Fixed costs such as office rent and utility bills were held constant, as well as income taxes, since the applicable tax rate is known and can be estimated upfront as new sales figures come in.

Variance Analysis Example Questions

• Which neglected factors led to the 20% underestimation of cash revenue?
• How can our company’s A/R collection processes be improved to fix the current issue ($432k collected vs $540k expected)?
• While the increases in inventory purchases (COGS) and CapEx are reasonable considering the revenue increase, was the recent spending in-line with historical trends as a percentage of revenue?

The expected net change in cash for 2022 was off by only $2,400, or 0.3%, in favor of the company – meaning there is more cash on hand for the company than originally forecasted.

• Google+
• Top Down Forecasting
• Bottom Up Forecasting
• 13-Week Cash Flow Model (TWCF)
• Income Statement Forecasting Guide

We're sending the requested files to your email now. If you don't receive the email, be sure to check your spam folder before requesting the files again.

The Wall Street Prep Quicklesson Series

7 Free Financial Modeling Lessons

Get instant access to video lessons taught by experienced investment bankers. Learn financial statement modeling, DCF, M&A, LBO, Comps and Excel shortcuts.

Original text

The 12-month cash flow statement is one of the three fundamental financial statements for a business. (The other two are the balance statement and the profit and loss statement .)

Like a checking account statement, the cash flow statement shows the money going into and out of your business. You'll include a cash flow statement in the financial section of your business plan. 

What is in a Cash Flow Statement?

The cash flow statement includes:

• Cash received . This might include income from sales, loan proceeds or interest income. You can estimate when you will get paid if you’ve already made sales or received orders.
• Cash paid out . This includes inventory, other purchases, payroll, rent, utilities, taxes, and loan payments. (This cash flow statement template consists of a “pre-startup” column for cash paid out before the cash flow statement period begins.)

Subtract cash paid out from cash received, and you have your cash position for the end of the month.

How to Use a Cash Flow Statement

For new and growing business owners, every dollar counts. Cash flow problems are a common cause of small business failure. Reviewing the company's cash flow statement regularly can help entrepreneurs avoid this fate. New and established business owners can use a cash flow projection to anticipate working capital needs and plan for upcoming expenses. 

Do you need help with your cash flow statement? Connect with a SCORE mentor online or in your community for free, personalized advice.

Small Business Cash Flow – Understanding Money Management Understanding cash flow and money management is critical to tracking profits and reinvesting for business growth.

7 Ways to Survive a Cash Flow Crunch A common challenge for small business owners is keeping their cash flow on an even keel. These 7 ideas can help you navigate a temporary cash shortfall.

3-Year Cash Flow Statement Use this 3-year cash flow statement template to create long-term cash flow projections and test different business scenarios.

Copyright © 2024 SCORE Association, SCORE.org

Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

12 Month Profit and Loss Template

This basic 12 months Profit and Loss projection template designed with MS Excel can be used as a good attendant for your business plan in conjunction with a 3 or 5 year projection, a cash flow statement and a balance sheet. It also has feature of sales forecasting which is a process of managing and analyzing information in a way that make it promising to approximation what your sales will be. This template outlines some simple methods of forecasting sales.

Version: Excel 2007 or later File Size: 14 KB

Following is the preview and download link of this  free 12 Month Profit and Loss Template,

Click here to download

An official website of the United States government

Here’s how you know

Official websites use .gov A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS A lock ( Lock A locked padlock ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

Highly active hurricane season likely to continue in the Atlantic

Near-record sea surface temperatures and the possibility of la nina are key factors.

A satellite image of Beryl approaching land on the Texas coast in the Gulf of Mexico taken by NOAA's GOES-16 (GOES East) satellite at 11:56 PM (EDT) on July 7, 2024. (Image credit: Beryl approaches Texas coast.)

Spanish language infographic: August Update for the 2024 Atlantic Hurricane Season Outlook summary

Spanish language infographic: August Update for the List of 2024 Atlantic tropical cyclone names chosen by WMO

Nation hit with record heat, wildfires and Hurricane Beryl in July

Atmospheric and oceanic conditions have set the stage for an extremely active hurricane season that could rank among the busiest on record. With the peak of hurricane season quickly approaching, NOAA’s National Weather Service urges everyone to know their risk; prepare for threats like damaging winds, storm surge and inland flooding from heavy rainfall; and to have a plan if asked to evacuate.

In their routine mid-season hurricane outlook update, forecasters from NOAA’s Climate Prediction Center updated the number of expected named storms to 17-24 (with winds of 39 mph or greater), of which 8-13 could become hurricanes (winds of 74 mph or greater), including 4-7 major hurricanes (winds of 111 mph or greater). This updated outlook is similar to the initial outlook issued in May; it includes totals for the entire six-month hurricane season, including the 4 named storms (2 tropical storms and 2 hurricanes) to date.

Hurricane season runs from June 1 through November 30.

“The hurricane season got off to an early and violent start with Hurricane Beryl, the earliest category-5 Atlantic hurricane on record,” said NOAA Administrator Rick Spinrad, Ph.D. “NOAA’s update to the hurricane seasonal outlook is an important reminder that the peak of hurricane season is right around the corner, when historically the most significant impacts from hurricanes and tropical storms tend to occur.”

In the Atlantic basin, a typical season will yield 14 named storms, of which seven become hurricanes and three become major hurricanes. Atmospheric and oceanic conditions continue to support an above-normal 2024 Atlantic hurricane season, with a 90% probability of this result. 2024 has only a 10% chance of a near-normal season and a negligible chance of a below-normal season.

The 2024 Atlantic hurricane season has already brought significant impacts:

• Tropical Storm Alberto formed on June 17, and over the following days it brought nearly a foot of rain to parts of Texas and New Mexico, triggering flash flood emergencies. 
• On July 1, Hurricane Beryl became the earliest category-5 storm on record in the Atlantic basin. Beryl caused catastrophic damage and approximately 20 fatalities in several islands in the Caribbean Sea, with an additional preliminary death toll of about 25 people in Texas, Louisiana and Vermont. 

“Hurricane Beryl broke multiple long-standing records in the Atlantic basin, and we’re continuing to see the climatological hallmarks of an active season,” said Matthew Rosencrans, lead hurricane season forecaster with NOAA’s Climate Prediction Center. “Sea surface temperatures remain abnormally high, and La Nina is still expected to emerge during the hurricane season, so the time to prepare is now.” 

Factors that could influence this year’s forecast

The Atlantic ocean basin is expected to be remarkably active due to several factors:

• Warmer-than-average sea surface temperatures in the tropical Atlantic Ocean and Caribbean Sea.
• Reduced vertical wind shear.
• Weaker tropical Atlantic trade winds. 
• An enhanced west African monsoon. 

These conditions are expected to continue into the fall. Of note, the dry Saharan air that prevented tropical storm development during portions of the middle of the summer is expected to subside in August. 

Potential climate influences

An ongoing climate factor in the Atlantic basin is the continued warm phase of the Atlantic Multi-Decadal Oscillation, which reappeared in 1995 and has been favoring more active hurricane seasons ever since. Another factor this year is the possibility of La Nina developing in the coming months. Indicative of cooler-than-average sea surface temperatures in the equatorial regions of the eastern Pacific Ocean, La Nina can further weaken the wind shear over the Atlantic Basin, which enables storms to develop and intensify.

About NOAA’s Hurricane Season Outlook

NOAA’s Hurricane Season Outlook is for overall seasonal activity and is not a landfall forecast. Landfalls are largely determined by short-term weather patterns, which are only predictable within about a week of a storm potentially reaching a coastline. NOAA’s National Hurricane Center provides tropical weather outlooks out to five days in advance, provides track and intensity forecasts for individual storms and issues watches and warnings for specific tropical storms, hurricanes and the associated storm surge.

Stay informed: Consult the National Hurricane Center  website, hurricanes.gov, for the latest about tropical storm and hurricane activity in the Atlantic and Pacific Ocean basins. You can also follow updates from NHC on X at @NHC_Atlantic. 

Climate, weather, and water affect all life on our ocean planet.  NOAA’s mission  is to understand and predict our changing environment, from the deep sea to outer space, and to manage and conserve America’s coastal and marine resources. 

Media contact:

Erica Grow Cei, NWS Public Affairs, erica.grow.cei@noaa.gov , (202) 853-6088

Related Features //