Blog · Forecast and pipeline · Finance and FP&A teams
Projected financial statements connect expected profit, financial position and cash movements. Follow a checked forecast, compare it with actual results, and separate profit misses from collection timing.
Projected financial statements translate operating assumptions into expected profit, closing balances and cash movements. Review them as one connected package: a profitable income forecast can still leave the company short of cash.
The SBA's business-planning guidance includes forecast income statements, balance sheets, cash flows and capital expenditure budgets. Review those outputs against actual results here; use the three-statement financial model guide for detailed workbook construction.
Collect the approved forecast, opening balance sheet, actual closing statements, assumptions register and supporting receivables, inventory, capital expenditure and debt schedules.
Align entities, currency, policies, account mapping and expense signs. Investigate missing forecast lines before treating them as zero.
A useful long-form export has period in column A, version in B, statement line in C and amount in D. With the reporting period in F1, a version name in G1 and the requested line in E2, the summary formula is:
=SUMIFS($D$2:$D$5000,$A$2:$A$5000,$F$1,$B$2:$B$5000,G$1,$C$2:$C$5000,$E2)
Copy for each input line and version, then rebuild subtotals. Do not sum balance-sheet months: each balance is a position at a date. See the monthly financial report template for the layout.
Fictional US distributor Meadowline Supply approved its third-quarter forecast on June 30, 2026: 30,000 units at $50 each, producing $1,500,000 revenue. Cost of goods sold was 60% of revenue; other inputs came from approved schedules.
Actual sales were 29,400 units at the same price, or $1,470,000. Both columns cover July 1 through September 30, 2026. Dollar calculations are exact, without rounding.
| Statement line | Forecast (USD) | Actual (USD) | Actual minus forecast (USD) |
|---|---|---|---|
| Revenue | 1,500,000 | 1,470,000 | -30,000 |
| Cost of goods sold | 900,000 | 900,000 | 0 |
| Cash operating expenses | 300,000 | 310,000 | 10,000 |
| Depreciation | 40,000 | 40,000 | 0 |
| Interest expense | 20,000 | 20,000 | 0 |
| Income before tax | 240,000 | 200,000 | -40,000 |
| Income tax expense | 60,000 | 50,000 | -10,000 |
| Net income | 180,000 | 150,000 | -30,000 |
Tax is an illustrative 25% of pretax income, not a statement of the US statutory rate. There are no permanent or temporary tax differences in the example.
To rebuild this table with revenue in B2 and the four expense inputs in B3:B6:
B7: =B2-SUM(B3:B6)
B8: =B7*25%
B9: =B7-B8
D2: =C2-B2
Copy the profit formulas to actual column C and the variance formula down column D. Revenue fell by $30,000, cash operating expenses rose by $10,000 and tax expense fell by $10,000: together those movements explain the $30,000 net-income shortfall. The projected profit and loss statement guide covers the income assumptions in more detail.
Both versions use the same opening balances, $120,000 equipment purchases, $40,000 depreciation, $50,000 debt repayments and $30,000 dividends. There are no disposals, new borrowing, share issues or other equity movements.
| Balance-sheet line | June 30 opening (USD) | September 30 forecast (USD) | September 30 actual (USD) |
|---|---|---|---|
| Cash | 300,000 | 250,000 | 170,000 |
| Accounts receivable | 400,000 | 450,000 | 500,000 |
| Inventory | 500,000 | 550,000 | 550,000 |
| Net property and equipment | 800,000 | 880,000 | 880,000 |
| Total assets | 2,000,000 | 2,130,000 | 2,100,000 |
| Accounts payable | 350,000 | 380,000 | 380,000 |
| Debt | 650,000 | 600,000 | 600,000 |
| Equity | 1,000,000 | 1,150,000 | 1,120,000 |
| Total liabilities and equity | 2,000,000 | 2,130,000 | 2,100,000 |
Equity is opening equity plus net income minus dividends. Net equipment is opening equipment plus purchases minus depreciation. Cash comes from the cash flow reconciliation, rather than an unexplained amount entered to make the balance sheet balance.
The SEC's explanation of cash flow statements describes the indirect reconciliation from net income through noncash items and operating balance changes. Here, all interest and income tax expense is paid during the quarter, with no related accrual changes.
| Cash movement | Forecast calculation (USD) | Forecast (USD) | Actual (USD) |
|---|---|---|---|
| Net income | From income statement | 180,000 | 150,000 |
| Add depreciation | Noncash expense | 40,000 | 40,000 |
| Receivables movement | -(450,000 - 400,000) | -50,000 | -100,000 |
| Inventory movement | -(550,000 - 500,000) | -50,000 | -50,000 |
| Payables movement | 380,000 - 350,000 | 30,000 | 30,000 |
| Operating cash flow | Sum of rows above | 150,000 | 70,000 |
| Investing cash flow | Equipment purchases | -120,000 | -120,000 |
| Financing cash flow | -50,000 - 30,000 | -80,000 | -80,000 |
| Change in cash | Operating + investing + financing | -50,000 | -130,000 |
| Closing cash | Opening cash + change in cash | 250,000 | 170,000 |
The forecast cash formula can be entered directly as:
=300000+180000+40000-(450000-400000)-(550000-500000)+(380000-350000)-120000-50000-30000
Actual closing cash is $80,000 below forecast. The bridge is the $30,000 net-income shortfall plus $50,000 more cash absorbed by receivables; every other cash movement matches forecast. Assign the sales-volume question to sales leadership, the operating-expense increase to its cost owner and the collection gap to credit control.
Test collection timing independently. Keep every forecast input unchanged except closing receivables, increasing them from $450,000 to $500,000. Operating cash flow becomes $100,000 and closing cash becomes $200,000; net income stays $180,000. Total assets still equal $2,130,000 because the extra receivable replaces cash dollar for dollar.
Before approving a revised outlook, require zero differences for assets less liabilities and equity, cash flow closing cash less balance-sheet cash, and ending equity less (opening equity plus net income minus dividends). A forecast that balances still needs credible assumptions; these identities prove consistency, not likelihood.
Bring your approved forecast, actual statement exports and assumption schedule: Covirage maps the columns, and its tools compute and check line differences and supplied statement reconciliations. The external AI model explains the results with every figure traced to its rows. Create a free Covirage account and bring a sample of your own workbook.
See forecast analysis for the supporting workflow.
Historical statements report activity and balances for completed periods. Projected statements estimate future results using assumptions about sales, costs, collections, investment and financing. Keep the forecast version and preparation date so later comparisons measure the original expectation accurately.
Yes. Customers may pay after revenue is recognized, inventory can absorb cash, and equipment purchases or debt repayments can exceed cash generated by operations. Reconcile profit to operating cash flow before including investing and financing cash movements.
Record the assumption, unit, period, owner, supporting evidence and forecast version. Cover sales volume and price, cost behavior, collection and payment timing, capital spending, depreciation and financing. Identify which assumptions changed before explaining a revision.
Keep the original forecast for performance review and store a separate updated outlook. Replacing original forecast values with actual results makes the plan appear more accurate and removes the evidence needed to learn from forecast misses.