Finance is the most important component of any business, whether it is small or large. Financial projections are made for different time periods according to the need of a business nature or processes. Financial projection template is very helpful in the creation of financial projection document for business use. The template is easy to download and customize according to the organizational requirements. The use of this template makes the task quite easy and quick. The financial projection is a game of numbers so the spreadsheet software is a very good option for document creation. Financial projection template commonly consists of three sheets. First sheet includes income statement and balance information that is available for the business operations. The second sheet comprises the cash flow statement of business that shows the movement of cash during business processes. And the third sheet displays a graphical comparison of different values in the income and cash flow statements. The use of financial projection template not only brings ease, but also provides the ideas for creating a personalized financial projection.
What is financial projection?
Financial projection is financial document relating to any business that contains the revenue and expense for a specified future time period. It can be said a forecast or prediction of future income and business expenses. It becomes a business progress monitoring tool as the predicted values are compared with actual income and business expenses. If the actual value surpasses the values in the financial projection document it is an alert to manage the revenue and expenditure balance. On the other hand, if the actual values become equal or less than the projection values the business is considered progressing as per the expectations.
Financial projection helps to determine the following.
- Organization’s actual specific targets.
- Provides feedback and helps in monitoring the business progress.
- Future problems regarding the future processing period.