Financial Projections and Analysis Considerations
An important part of the business planning process is the preparation of financial
statements to predict the outcome of an organization’s results in future periods.
projections are based on compiling the internal and external accounting data you already use
in the day-to-day management of your business. By projecting your revenue and expenses, you can get a more
accurate view for how successful your business can be. Creating financial projections is not an easy task
but is a very important part of developing a sound strategy. The financials tell you what goals to keep and
what to cut.
Projections can also be a guide to help your business grow without
running out of cash. To generate and support additional revenues, additional cash is always required.
Financial projections help you assess what additional assets are needed to support increased revenue and the
potential impact on your balance sheet. The projected financial plan indicates how much additional debt or
equity you need to remain solvent and healthy.
If your business has been in operation for more than a year, creditors will not only
request data on your past performances, referred to as historical data, they will also ask for financial
projections. Creditors typically want these types of information for the past and future three to five
years. Depending on how long you’ve been in business, it could be more… or less.
Financial projections should include a forecasting of the income statement, the
balance sheet, and the cash flow statement. Projections are made by the month for the first year and then by
the year for the next two years.
Developing financial projections for your expanding business can be complicated. To
make it less overwhelming, our expert finance team can provide the information on required
financial statements every business plan should have.
Financial Projections Accounting Services
All businesses, whether startup or growing, will be required to supply prospective financial data for
creditors or investors. Nugent & Associates develops financial
projections, determines effective resource allocations and sets clear objectives. Here is a list of
important financial statements we include with financial projections:
Historical Financial Data
For Established Business
If you own an established business, we help you to meet creditor requests for historical data related to
your company's performance for the last three to five years, depending on the length of time you have been
Typically, the historical financial data to include are your company's income
statements, balance sheets, and cash flow statements for each year you have been in business (usually for up
to three to five years).
For Startup Business
Many entrepreneurs complain that building accurate revenue and expenses forecasts requires too much time
that would be better spent selling rather than planning. Unfortunately, few investors will make a financial
commitment if forecasts are unavailable.
We can help you determine your financial
requirements for your startup and develop a more efficient planning and cash flow forecasting for budgeting,
including operational and staffing plans.
Creditors and investors will also want to see the prospective financial data that reflects expectations of
revenue and profit.
What our financial experts can do for you:
Forecast income statements, balance sheets, cash flow statements and capital expenditure budgets for
each year you’ve been in business.
For the first year of business, we include monthly or quarterly financial projections. After the first
year is recorded, quarterly or yearly projections will suffice for the next four years.
We ensure your projections match funding requests so there are no inconsistencies. We can help to
explain any assumptions that accompany your projections.
We will write an analysis of your financial information. This analysis can include ratio and trend
analysis along with charts and graphs for a visual overview.
Nugent & Associates is-qualified to assist you with your financial plans.
The financial forecasting and projecting process begins with our focus on understanding your specific
long and short-term needs, and goals. We can then perform a thorough analysis of your financial situation
and provide recommendations and projections.