Projections and Forecasts

Available from Accessible Business, LLC

The heart of any successful business plan and/or strategic plan is the forecast or projection. A forecast or projection is similar to the historical data of a business with one key difference: forecasts and projections are prospective, they are for the future. A forecast consists of prospective financial statements that present an expected financial position, results of operations, expenses and cash flows. A forecast is based on assumptions reflecting conditions that are expected to exist and the anticipated course of action expected to be taken.

A projection consists of prospective financial statements that present, given one or more hypothetical assumptions; the company’s expected financial position, results of operations, expected expenses and cash flows. A financial projection is prepared to present a course of action for evaluation based on a “what if” scenario.

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