Projected Financial Statements

Projected financial statement analysis is a technique that allows an organization to examine the expected results of strategies being implemented. This analysis can be used to forecast the impact of various implementation decisions (for example, to increase promotion expenditures by 50 percent to support a market-development strategy or to increase research and development expenditures by 70 percent to support product development). Most financial institutions require at least three years of projected financial statements whenever a business seeks capital. A projected income statement and balance sheet allows an organization to compute projected financial ratios under various scenarios. When compared to prior years ...

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