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A projected balance sheet translates operating and financing assumptions into future assets, liabilities and equity. Build a linked forecast, reconcile cash and compare the supplied projection with actual balances.
A projected balance sheet estimates assets, liabilities and equity at a future reporting date. Build it from an approved opening statement, connect each line to an explicit assumption and calculate cash from the expected movements before checking that the statement balances.
Export the approved balance sheet, receivables and inventory schedules, debt schedule and planned capital spending. Keep entity, currency and account mapping consistent across actual and forecast files. The balance sheet guide covers statement structure.
The SBA's business planning guidance includes forecast balance sheets alongside income statements, cash flow statements and capital expenditure budgets. That connection matters: a revenue plan alone cannot explain future cash or funding needs.
Retain the target and approval dates. This example projects a US distributor from December 31, 2025 to March 31, 2026. It assumes even quarterly activity, no asset disposals, no new borrowing or capital contributions, and no other balance changes beyond those shown.
On a worksheet named Inputs, enter each assumption label in column A and its value in B. The row column below identifies its worksheet row; units and sources document the inputs.
| Row | Assumption | Value | Unit or source |
|---|---|---|---|
| 2 | Quarterly credit revenue | 1,200,000 | USD; sales plan |
| 3 | Quarterly cost of goods sold | 720,000 | USD; operating plan |
| 4 | Quarter length | 90 | Days |
| 5 | Receivables days | 45 | Days; collection assumption |
| 6 | Inventory days | 60 | Days; stocking assumption |
| 7 | Payables days | 30 | Days; simplified cost-based assumption |
| 8 | Net income | 120,000 | USD; approved income forecast |
| 9 | Depreciation | 20,000 | USD; fixed-asset schedule |
| 10 | Cash capital spending | 50,000 | USD; approved investment schedule |
| 11 | Debt principal repayment | 25,000 | USD; financing schedule |
| 12 | Cash dividends | 30,000 | USD; approved distribution schedule |
In this simplified forecast, ending receivables equal quarterly credit revenue divided by quarter length, multiplied by receivables days. Inventory and payables use the corresponding cost-based assumptions. The working capital guide explains the operating balances behind these drivers.
Payables are deliberately estimated from cost of goods sold here. A purchasing schedule is more precise when purchases and expense recognition differ substantially. Seasonal companies should use monthly activity and collection or payment schedules rather than treating the quarter as uniform.
On a separate worksheet, put this statement in columns A:C, with headers in row 1. Amounts are whole USD; no rounding is needed.
| Line | Opening (USD) | Projected (USD) |
|---|---|---|
| Cash | 200,000 | 75,000 |
| Receivables | 480,000 | 600,000 |
| Inventory | 420,000 | 480,000 |
| Net property and equipment | 400,000 | 430,000 |
| Total assets | 1,500,000 | 1,585,000 |
| Accounts payable | 220,000 | 240,000 |
| Accrued liabilities | 40,000 | 40,000 |
| Debt | 300,000 | 275,000 |
| Total liabilities | 560,000 | 555,000 |
| Equity | 940,000 | 1,030,000 |
| Liabilities plus equity | 1,500,000 | 1,585,000 |
| Balance check | 0 | 0 |
Enter these formulas:
C3: =Inputs!B2/Inputs!B4*Inputs!B5
C4: =Inputs!B3/Inputs!B4*Inputs!B6
C5: =B5+Inputs!B10-Inputs!B9
C7: =Inputs!B3/Inputs!B4*Inputs!B7
C8: =B8
C9: =B9-Inputs!B11
C11: =B11+Inputs!B8-Inputs!B12
Net property and equipment becomes $430,000 after adding capital spending and subtracting depreciation. Debt falls to $275,000, while opening equity plus net income less dividends becomes $1,030,000.
Net income is not the change in cash. The SEC's financial statement guide explains the adjustment for noncash costs and operating assets and liabilities when reconciling earnings to operating cash flow.
The cash bridge uses changes between the statement's opening and projected columns:
| Cash bridge step | Cash effect (USD) |
|---|---|
| Net income | 120,000 |
| Add back depreciation | 20,000 |
| Increase in receivables: 600,000 - 480,000 | -120,000 |
| Increase in inventory: 480,000 - 420,000 | -60,000 |
| Increase in payables: 240,000 - 220,000 | 20,000 |
| Change in accrued liabilities | 0 |
| Operating cash flow | -20,000 |
| Capital spending | -50,000 |
| Debt principal repayment | -25,000 |
| Dividends | -30,000 |
| Net cash movement | -125,000 |
| Add opening cash | 200,000 |
| Ending cash | 75,000 |
The statement's cash formula and checks are:
C2: =B2+Inputs!B8+Inputs!B9-(C3-B3)-(C4-B4)+(C7-B7)+(C8-B8)-Inputs!B10-Inputs!B11-Inputs!B12
C6: =SUM(C2:C5)
C10: =SUM(C7:C9)
C12: =C10+C11
C13: =C6-C12
Assets and liabilities plus equity both equal $1,585,000. The zero check supports internal consistency; it does not prove that management's assumptions will occur. The cash balance sheet article covers reported cash and its supporting reconciliation.
Compare saved forecasts and actuals for the same date. Suppose collections are slower, with every other movement unchanged:
| Line | Forecast (USD) | Actual (USD) | Actual minus forecast (USD) |
|---|---|---|---|
| Receivables | 600,000 | 650,000 | 50,000 |
| Cash | 75,000 | 25,000 | -50,000 |
| Total assets | 1,585,000 | 1,585,000 | 0 |
Receivables are $50,000 above the $600,000 projection: $50,000 / $600,000 = 8.3% after rounding to one decimal place.
Cash becomes $25,000: the projected $75,000 less the additional $50,000 tied up in receivables. Total assets remain $1,585,000 because one asset increased while another decreased. Use flux analysis to explain the reported movements, supported by collection records.
Upload your supplied projection, assumptions and actual balances in a file or Google Sheet; Covirage maps the columns, and its tools compute differences and check the figures. The external AI model explains the results with every figure traced to its rows. Create a free Covirage account, which takes about a minute, then set up your business and bring a sample of your own data.
See forecast analysis for the supporting workflow.
Revenue can help project receivables, but it does not determine every balance. You also need assumptions for purchasing, inventory, payments, capital spending, debt, earnings and distributions. Each projected line should have a named driver or a documented schedule.
Calculate cash from opening cash and projected cash movements, then compare it with the amount implied by the accounting equation. Forcing cash to close a gap conceals missing or inconsistent assumptions and can hide a financing requirement.
Update it when actual balances become available and when approved operating or financing assumptions change. Preserve the earlier forecast version so differences can be separated into assumption changes, execution differences and accounting or mapping issues.