QuickBooks 2016 All-in-One For Dummies

Chapter 2

Creating a Business Plan Forecast

In This Chapter

• Enjoying a little refresher on financial statements and ratios
• Working with 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 a 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, just type http://stephenlnelson.com/wp-content/uploads/10_year_bizplan.xlsx in your web browser’s address box.

Reviewing Financial Statements and Ratios

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 statements and ratios to describe the past or future financial condition and performance of a business.

The term financial statement can refer to one of several types of schedules and summaries of economic ...