A projected balance sheet, also known as a pro forma balance sheet, depicts the estimated total assets and liabilities of a corporation. A pro forma balance sheet is a table of future estimates. As a result, it will assist your company in managing its assets now to achieve greater results in the future.

The asset will include both long-term (non-current) and current assets. Long-term assets will comprise the structure, land, machinery, and vehicles. Current assets include cash in hand/bank, receivables, and socks for the short term.

On the liability side, we have both non-current and current liabilities. Non-current liabilities include term loans, while current liabilities include accounts payable and short-term loans such as working capital loans.

If you have asked for a company loan for your new project or wish to purchase new fixed assets, you may be required to submit a projected balance sheet. By presenting a well-crafted forecasted balance statement from Finaxis, the bank will be certain that the business unit is feasible for investment/loan.

How to Prepare Projected Balance Sheet

Step 1: Calculate cash on hand and cash at the bank

If you do not have a cash booking record, you can show cash in hand after reviewing your business’s cash balance. You can also check the available balance at the bank. Both will be considered current assets on your balance sheet.

Step 2: Calculate Fixed Assets

Notice everything around you. Make a list of assets whose benefits you receive for longer than one year. Check the price on cash memos or past bills. Try to calculate the time it will be in use. If you’ve used it for three years. Its worth will undoubtedly decline owing to depreciation. Charge 10% to 20% per year on all fixed assets up to the usage period, using any form of depreciation. The system will now present you with the fixed asset’s current cost. Display it on the asset side of the balance sheet.

Step 3: Determine the value of financial instruments

If you put your money into stocks, bonds, or other financial assets. Write down the purchasing price. If it has declined, you can also display the current market price of financial instruments.

Step 4: Calculate your business earnings

If you have not prepared a profit and loss statement. You can compare your expenses to your revenue. If your income exceeds your expenses, you will make a profit. That amount will be shifted to the balance sheet’s liabilities side. You should only deduct charges for which you received benefits in one year.

Step 5: Calculate the business’s liabilities

These liabilities include bank loans, secured loans, and other debts. This will be included on the liabilities side of the anticipated balance sheet.

Step 6: Calculate the Business’s Capital

Business capital can be calculated by removing outside liabilities from total assets. This will also increase the liability side of the balance sheet.

Conclusion: 

Non-finance/accounting people will be puzzled about how to create the projected balance sheet for their project report. We, at Finaxis help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India.

To sum up, creating a projected balance sheet needs thorough research, precise forecasting, and wise decision-making. These stages, along with the use of financial modeling methodologies, allow firms to create projections that are both realistic and useful for strategic planning and decision-making.