Building up forecast from payroll schedules, operating expenses schedules and sales forecast to the three financial statements
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Our financial projection template will help you forecast future revenues and expenses by building up from payroll schedules, operating expenses schedules, and sales forecast to the three financial statements.
Below is a screenshot of the financial projection template:
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Components of a financial projection template
This financial projection template contains the following sections:
#1 Payroll (current year)
In the payroll (current year) worksheet, you will input the payroll expenses for each of the full-time employees, part-time employees, and contractors. The model helps you break down the salary, taxes, employee insurance, pension, and employee bonus expenses so you can easily track the total amount for each of the items. These individual monthly payrolls then roll up to the summary tables, which automatically calculate the average hourly wage and net pay for each month (all expenses except bonuses) by staff type.
#2 Payroll (forecast)
In the payroll (forecast) worksheet, you will put your own assumptions for the growth rate of the number of workers for the period of forecast. These are the only manual inputs required for the model. Once the assumptions are filled in, the pre-entered formulas will generate the payroll forecast for the rest of the period and calculate average hourly wages by staff type. You’ll also be able to estimate the total amount of taxes, employee insurance, and pension expenses for each of the years.
#3 Sales (current year)
In the sales (current year) worksheet, you’ll input the per-unit sales price, the number of units sold, and the per-unit cost of goods sold for each product line under the “sales breakdown” section. The model will automatically calculate the monthly revenue, COGS, and gross margin for each product line, which are linked to the summary tables at the top of the worksheet. You’ll be able to quickly understand the sales and margin for each product for the current year.
#4 Sales (forecast)
In the sales (current year) worksheet, assumptions on sales growth rate are entered for the forecast period to generate the predicted revenue, COGS, and gross margin for the following years.
#5 Operating expenses (current year)
The operating expenses (current year) worksheet is for you to enter the actual operating expenses for the current year. These will help build up the forecast for operating expenses and the income statement.
#6 Operating expenses (forecast)
In the operating expenses (forecast) worksheet, the operating expenses forecast for the next few years will be calculated using the assumptions for each of the expense items.
#7 Income statement (current & forecast)
The income statements for the current year and forecast period are built up by linking to values in the sales worksheets and operating expenses worksheets.
#8 Balance sheet (current year)
This balance sheet worksheet consists of two main sections: balance sheet and supporting schedules. Balance sheet items such as accounts receivable, inventory, accounts payable, and retained earnings will be manually input, while items such as cash, property and equipment, and long-term debt will be linked to other parts of this financial projection template. For example, the debt & interest schedule under the supporting schedules section will help you compute the amount of debt closing and interest expenses, which will then be linked back up to the balance sheet as long-term debt and to the income statement as interest expense.
The cash flow statements for the current year and forecast period are constructed using figures calculated in the income statement, balance sheet, and supporting schedules. The closing cash balance for each month will be linked back to the balance sheet, shown as cash under current assets.
#11 Financial ratio analysis
The final section of this financial projection template is the financial ratio analysis. This worksheet will show you the list of all commonly used financial ratios including profitability ratios, efficiency ratios, liquidity ratios, leverage ratios, and coverage ratios, which are calculated using all the worksheets previously built. The ratios will allow you to understand the financial stability of the company and its expected performance in the following years.
More Free Templates
For more resources, check out our business templates library to download numerous free Excel modeling, PowerPoint presentations, and Word document templates.
Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.
A well rounded financial analyst possesses all of the above skills!
Additional Questions & Answers
CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.
In order to become a great financial analyst, here are some more questions and answers for you to discover:
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