Financial forecasting is essential in business planning and decision-making process especially decisions involving business growth. Almost every business whether new startup or existing needs financial projections for various reasons such as:
• Decision making related future growth of business.
• Prospective investor(s) may need financial projections before making any investment.
• Bankers may ask for financial projections before funding any project.
• Analysis of financing need and assistance in monitoring of cashflows.
• Preparation for Budget and management of resources.
Financial projections are developed based on historical financial information, plan of management and expectation regarding changes in external dynamics in the relevant market. Typically, financial projections for a business can include the following covering period of 3 to 5 years:
• Summary and financial highlights
• Revenue stream analysis
• Sales forecast
• Direct and operating expenses
• Profit and loss forecast
• Cash flow forecast
• Balance sheet forecast
• Break-even analysis
• Investor Return Calculation such as Payback period, IRR, ARR, NPV
• Ratio analysis
• Company Valuation, if required
Our experts at VA, can assist you with financial models which are based on relatively realistic approach and financial projections can be presented under different scenarios. We ensure the expectation of changes in external factors have been built appropriately in financial model.