A free example of a financial statement forecast

You will find a financial statement forecast tailored to your project in our list of 200+ financial plans

All our financial plans do include a financial statement forecast.

How can you easily create a financial statement forecast without getting overwhelmed?

In this article, we provide a free tool to do so. If you're looking for something more tailored to your specific project, feel free to browse our list of financial plans, customized for over 200 different project types here.

We'll also address the following questions:

How can one determine revenue growth assumptions for financial forecasting?
What are the main expense categories to include in a financial forecast?
How can one estimate working capital needs for a financial forecast?
What is the most effective method for forecasting cash flows?
How should capital investments be integrated into a financial forecast?
How can uncertainties and risks be managed in a financial forecast?
What software tools are recommended for creating a financial forecast?

Here Are the Steps to Easily Create a Financial Statement Forecast

To skip all these steps, you can simply download a financial forecast tailored to your industry.

• 1. Gather Historical Data or Industry Benchmarks:

  Research industry benchmarks or historical data relevant to your business. This will help you estimate initial sales and set realistic expectations.

• 2. Estimate Initial Sales:

  Based on your research, estimate the number of units you expect to sell in the first month and the price per unit. This will help you calculate your initial revenue.

• 3. Forecast Monthly Growth:

  Choose a conservative growth rate to apply to your monthly sales. This will help you project future revenue. For example, a 10% growth rate can be a good starting point.

• 4. Calculate Cost of Goods Sold (COGS):

  Determine the cost to produce each unit and multiply by the number of units sold to find your COGS. Apply the same growth rate to COGS as you did for sales.

• 5. Estimate Operating Expenses:

  List all your operating expenses, such as marketing, salaries, and rent. Estimate these costs on a monthly basis.

• 6. Calculate Gross Profit:

  Subtract COGS from your revenue to find your gross profit for each month.

• 7. Determine Net Income:

  Subtract your operating expenses from your gross profit to calculate your net income for each month.

• 8. Repeat for Subsequent Months:

  Continue this process for each subsequent month, adjusting for growth rates and any anticipated changes in costs or sales.

What Should Be Included in a Financial Statement Forecast?

Here are the key elements that should be included, all of which you will find in our financial forecasts tailored to 200+ different business projects.

Element	Description	Purpose	Frequency
Income Statement	A financial statement that shows the company's revenues and expenses over a specific period.	To assess the company's profitability and operational efficiency.	Monthly, Quarterly, Annually
Balance Sheet	A financial statement that provides a snapshot of the company's assets, liabilities, and shareholders' equity at a specific point in time.	To evaluate the company's financial position and stability.	Monthly, Quarterly, Annually
Cash Flow Statement	A financial statement that shows the inflows and outflows of cash within the company over a specific period.	To understand the company's liquidity and cash management.	Monthly, Quarterly, Annually
Sales Forecast	An estimate of future sales, often broken down by month, quarter, or year.	To plan for future revenue and manage inventory and resources.	Monthly, Quarterly, Annually
Expense Forecast	An estimate of future expenses, including fixed and variable costs.	To budget for future costs and manage financial resources effectively.	Monthly, Quarterly, Annually
Capital Expenditure Forecast	An estimate of future capital expenditures, such as investments in property, plant, and equipment.	To plan for long-term investments and manage capital resources.	Annually
Break-Even Analysis	An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue.	To understand the minimum sales needed to avoid losses.	Annually
Assumptions	The underlying assumptions used in the financial forecasts, such as growth rates, market conditions, and cost estimates.	To provide context and rationale for the financial projections.	As needed
Scenario Analysis	An analysis of different financial scenarios, such as best-case, worst-case, and most likely case.	To prepare for various potential outcomes and manage risk.	Annually
Key Performance Indicators (KPIs)	Metrics used to measure the company's performance against its strategic goals.	To track progress and make informed business decisions.	Monthly, Quarterly

Our financial forecasts are comprehensive and will help you secure financing from the bank or investors.

Common Questions You May Have

Reading these articles might also interest you:
- How to set up a cash flow projection for a small business?
- How to perform a cost-benefit analysis for a new project?
- How do you calculate forecasted EBIT?

What are the key components to include in a financial statement forecast?

The key components of a financial statement forecast include projected income statements, balance sheets, and cash flow statements.

Each of these components should be detailed with assumptions about revenue growth, expense trends, and capital expenditures.

Additionally, you should include a sensitivity analysis to understand how changes in assumptions impact the forecast.

How do you estimate revenue growth for a financial forecast?

Revenue growth can be estimated by analyzing historical sales data and identifying trends and seasonality.

It's also useful to consider market conditions, competitive landscape, and any planned marketing or sales initiatives.

Typically, companies project revenue growth rates of 5% to 10% annually, but this can vary widely depending on the industry and business model.

What is a reasonable assumption for annual expense growth?

Annual expense growth can be estimated by reviewing historical expense data and considering inflation rates and planned business activities.

For many businesses, a reasonable assumption for annual expense growth is 3% to 5%.

However, this can vary significantly based on factors such as changes in operational scale, cost-saving measures, and economic conditions.

How do you project capital expenditures in a financial forecast?

Capital expenditures can be projected by identifying planned investments in property, plant, and equipment, as well as technology upgrades.

Reviewing historical capital expenditure patterns and aligning them with future business plans is essential.

Typically, businesses allocate 5% to 10% of their revenue to capital expenditures, but this can vary based on industry and growth stage.

What is the importance of a sensitivity analysis in a financial forecast?

A sensitivity analysis helps to understand how changes in key assumptions impact the financial forecast.

It allows businesses to identify potential risks and prepare contingency plans.

By modeling different scenarios, companies can make more informed decisions and better manage uncertainty.

How do you ensure the accuracy of your financial forecast?

Ensuring accuracy involves using reliable data sources, making realistic assumptions, and regularly updating the forecast based on actual performance.

It's also important to involve key stakeholders in the forecasting process to gain insights and validate assumptions.

Regularly comparing forecasted figures with actual results helps to refine the forecasting model over time.

What is a typical time horizon for a financial statement forecast?

The typical time horizon for a financial statement forecast is 3 to 5 years.

This period allows businesses to plan for medium-term goals while maintaining flexibility to adjust for short-term changes.

Longer-term forecasts can be less accurate due to the increased uncertainty, so they should be used with caution.