An Income Statement Projection Template is a document that represents an estimate of financial results of a company in a future period of time. It is similar to the “Income Statement“.
The main difference between an income statement and Income Statement Projection is that in an income statement the actual figures are taken into consideration, whereas in projections estimated figures are taken into consideration.
It is one of the most important documents of a Business Plan. It projects the revenue to be earned and expenses to be made for a particular period of time.
You can prepare this statement monthly, quarterly or yearly as per your requirement.
Income Projections are vital for every business. Big companies make projections in order to achieve their sales and other business goals.
It’s often used by new startups to check the feasibility of their new business before getting into actual markets.
These projections help you to decide your workforce against the targets. These projections will help the management to take important decisions for the in favor of the organization.
Similar to an income statement, the Income Statement Projection follows the following Rule:
Revenues – Expenses – Taxes = Net Profit.
We have created an easy and ready to use 12 months Income Statement Projection Template with predefined formulas. You just need to input data and it will automatically calculate the net earnings for you.
This template is useful for finance professions, finance students, accountants, auditors etc.
Let us discuss the contents of the template in details.
Contents of Income Statement Projection Template
The template consists of three major sections:
1. Header Section
2. Revenue Section
3. Operating Expenses Section
1. Header Section
As usual, the header section consists of the company name and the title of the template ” 12 months Income Statement Projection”.
2. Revenues Section
Revenue Section consists of sources of revenues of a company. Projections of all sources of income are listed in this section depending upon the type of a company.
In our example, we have taken only Sales of products as our revenue source.
Net Sales = Sales – Sales Returns.
we have considered an approximate 10 % value of sales as sales returns. You will not have to enter the sales return figures. The sheet will automatically calculate it.
Formula: = C5*10%.
For gross profits, we deduct the estimated cost of goods sold (COGS) from the Net Sales amount.
2. Operating Expenses Section
You will have to list all the Operating Expenses like salaries, rents, maintenance, Travel, transportation etc under this section. All these expenses are totaled.
SUM Function is used to make the total of the operating expenses.
Finally, the operating expenses are deducted from the Gross Profits. This will give you the Projected Net Profit for that particular period.
The subheading included here are as per the Income statement data that we have taken into consideration. It differs from cases to cases. You can add or remove subheadings are per your requirement.
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