A financial projection is an approach used to forecast the future income, revenue, costs, and expenses of a business or proposal.

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Typically, there are several methods used for the forecasting of a business’s financial position at any point in the future. For this purpose, internal historic data is used by developed businesses.

While for new business proposals, external market analysis is conducted to evaluate the financial sustainability of the business.

Financial Projection Template in Excel

The analysis of current financial data that helps to forecast a company or project/business’s future financial position is called financial projection. Basically, this projection has some limitations i.e; projection for 5 years or 10 years.

Financial Projection Excel Template

This forecasting may wrong too because there are always remain risk factors too.

A financial projection excel template can be used to develop short, mid, or long-term financial projections of any business.

A short-term financial project is usually a yearly forecast of the business containing month-by-month projects. The mid-term financial project of the business is calculated for the coming three years of the business. While for more than three years of projects, a long-term financial projection excel template is used.

Why Using Financial Projection Excel Template

There are several reasons for using the financial projection excel template for new startups or developed businesses.

However, a few of the most fundamental ones are;

  1. It is easy to use and helps beginners to effectively forecast the financial position of their startup.
  2. It helps the businesses to adopt the right approach for the projection of their financial stability in the future.
  3. It can be used to forecast the financial position of a business from short to long-term plans.
  4. It helps the businesses to set targets out of the business goals.
  5. It helps businesses to get feedback about the situation at any point in the future.
  6. It helps to forecast the problems and allows to control them.

The financial projection excel template can be used in different situations such as;

  1. While creating a new business model.
  2. Looking for investors to generate funds for business growth plans.
  • To better anticipate the financial stability of the business at any point in the future.

Essential Elements of Financial Projection Excel Template

financial projections elements

There are three fundamental financial sheets used by businesses. So, the financial projection also includes all of these to completely evaluate the financial position of the business in the future.

It includes the income statement, which covers the financial aspects such as revenue, expenses, other expenses, income, other income, net income.

The 2nd sheet is a cash flow projection that involves cash revenues, cash disbursements, and reconciliation.

Finally, the last balance sheet project covers the assets, liabilities, and equity of the business.

Below are some important elements that must be included;


  • An initial amount of investment
  • Employee Payroll Expenses
  • Expected Sales Forecast
  • Operating expenses in terms of 2-3 years
  • Cash flow statements for the first 2-3 years
  • Income statements for the first 2-3 years
  • Balance sheet
  • Breakeven analysis
  • Financial ratios and Percentage
  • Cost of goods sold
  • Cost-Benefit Analysis
  • Rate of Amortization
  • Rate of Depreciation

Steps to Create Financial Projection Excel Template

There is a simple five-step approach that can be used to create a financial projection excel template;

Step 1: Create the sales projection of the business for a specified period

Step 2: Create the projection of expenses/costs

Step 3: Create the projection of the business income statement

Step 4: Create the projection of the business balance sheet

Step 5: Create the projection of the business cash flow statement

The above steps can be followed for any new startup or for a small business to make an effective financial projection sheet for any point in the future to check the financial position of the business.

The financial projection Excel template helps the business to constantly evaluate the company’s core competencies, weaknesses, markets, and competition. So, it enables the business to better analyze the problems and business opportunities. Also, provide new growth opportunities for business.

Financial Projection Template Used For?

This financial projection is part of basic business planning and below there are important reasons of it used;

  1. We need this project management documentation tool when we are going to launch a new project. It helps to make a complete budget plan, provides statistical data that shows when we may be able to get profit from this project or business, and most importantly helps to set up financial achievement goals.
  2. However, if we already launched a project or business, this projection provides us sufficient financial data on the basis of, we set our financial planning and procurement plan.
  3. It also helps us to get on track in the pursuit of our goals.
  4. As we know that, a financial projection is part of financial planning, so when we need investment, clients, or any other stakeholders, these projections are very helpful to show the company’s position on the scale of years.


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