Projected cash flow statement is one of the most basic and important of all financial statements that need to be prepared. While there are other forms of financial statements that need to be prepared, it is the simplest form of a financial statement that usually involves general or average level of cash flow in the year. The following explanation will give you a better understanding of what the projected cash flow means.
A Projected cash flow statement is a general average level of cash outflow and its growth over the years. This kind of cash flow is basically used for any kind of business. Basically, it is a summary of all the finances of a company during a certain period of time. This sample financial statement sample is not that helpful if it does not have an overview of the financial data of the company.
Companies generally do not hire a bookkeeper to prepare the projection. It can be a little bit difficult and even time consuming especially if you need to develop it as a regular part of the financial statement. Actually, the difference between a financial statement and a projected cash flow statement is more about how it is to be used. It should show the current condition of the company. If a company can afford to spend the money on its accounting system, then the financial statement sample should contain a detailed, complete, and realistic forecast of the future financial status of the company.
Most of the companies will make use of the cash flow statement as a guide. This sample financial statement is basically an overview of what the company has done for the past few years. Sometimes, they will also use this as a reference for the future financial trend of the company.
The Projected cash flow statement sample consists of a section for the cash flow statement and a section for the income statement and balance sheet. They should be separated properly so that you will be able to see which needs to be added or subtracted from the other one. For example, cash flow statement should be segregated from the balance sheet. Some of the most common areas that you can find the estimated balance sheet of a company is in the annual report that they send to the Securities and Exchange Commission or in the investor relations section of the annual report.
The next point is that the projected cash flow statement sample should be prepared by a bookkeeper. It can be hard to do it on your own, so just take a look into the books of the accounting firm that is going to do the preparing. You do not have to pay extra for an estimate but it can be a little expensive especially if you have to go for a professional bookkeeper.
The estimated cash flow and the income statement are the things that we should keep track of all the time. It is always good to check them when needed and make sure that everything is correct. You can also see the trends if you monitor the trends of the company. For example, if the company is growing at the same rate, then the income statement would not be changed much because the growth will be less, and the income statement would be the same as the estimated cash flow.
As you can see, the projected cash flow statement sample is a simple form of analysis. You can learn how to prepare a well-organized budget that will help the management of your company to get a good picture of where they are headed and how they are going to manage to get out of the bad situation they are in.