How to prepare projected financial statements for bank loan?

A projected balance sheet is also known as a pro forma balance sheet. It determines the estimation of the total liabilities and total assets of any business entity. A pro forma balance sheet shows projections about the future. So, ideally, it helps to manage any type of business assets. So, it is an important aspect of business which cannot be ignored. Let me share with you how to prepare projected financial statements in excel.

How to make a projected financial statement ?

To learn how to prepare projected financial statements for bank loan, you need to calculate and properly assess how much you can invest in your business.

Step 1: Calculate the cash in hand and cash in the bank

If you have no record of your cash, you can show the cash in hand and the cash available in your bank account. These two things will be determined as your current assets on the balance sheet.

Sheet 2: Calculate the Fixed Assets

Make a spreadsheet and list down the number of assets you have. Check the price of each item from the cash memos and past bills. Calculate the value of each product as per the age of every item. 

Step 3: Check out the value of financial instruments

If you have invested in shares, bonds, and funds, you should calculate them as well. Based on the increase or decrease of the price, you need to show the financial statement.

Step 4: Calculate your business earnings

Check your expenses and incomes and compare them. If the income is more than the expenses, then that means your business is profitable. This you will need to transfer to the liability side of the balance sheet. 

Step 5: Calculate business’s liabilities

Liabilities such as bank loans, secured loans, and other loans should be calculated which will be added to the liabilities portion of the projected balance sheet.

Step 6:  Calculate business’s capital

The business capital can be calculated by deducting the outside liabilities from the total assets. And this amount will be added to the liability side of the balance sheet.

This was all about how to prepare projected financial statements in excel. I hope you find this informative.

Read more: