In This Chapter
Enjoying a little refresher on financial statements and ratios
Using the business plan workbook
Understanding the workbook's formulas
Customizing the workbook
Pro forma financial statements — which are income statements, balance sheets, and cash flow statements — constitute an integral part of business planning and the overall budgeting process. For that reason, I want to provide you with a bit of information about how you create such pro forma (or as if) statements.
From the very start, however, I need to warn you that in order to create such statements, you need another tool in addition to QuickBooks. Specifically, you need a spreadsheet program such as Microsoft Excel.
Assuming that you do have something like Microsoft Excel, you can use it and the example workbook that this chapter describes to create a simple, yet sophisticated, financial forecast for your business. To download the workbook, go to my Web site,
www.stephenlnelson.com, click the Free Stuff link, and then scroll down to and double-click on the 10-year Business Planning Template (Does P&L, Cash Flow and Balance Sheet Reports) link. If your fingers are up to it, you can also just type
www.stephenlnelson.com/bizplan.xls into your Web browser's address box.
Before I get into the nitty-gritty details of creating a business forecast, I need to briefly discuss what financial statements and ratios are and how to use financial ...