Financials

Business Plan Advisors can create your company’s spreadsheets and financial projetions, budget and more.

In business, a financial plan can refer to the three primary financial statements (balance sheet, income statement, and cash flow statement) created within a business plan. Financial forecast or financial plan can also refer to an annual projection of income and expenses for a company, division or department. A financial plan can also be an estimation of cash needs and a decision on how to raise the cash, such as through borrowing or issuing additional shares in a company.

While the common usage of the term “financial plan” often refers to a formal and defined series of steps or goals, there is some technical confusion about what the term “financial plan” actually means in the industry. For example, one of the industry’s leading professional organizations, the Certified Financial Planner Board of Standards, lacks any definition for the term “financial plan” in its Standards of Professional Conduct publication. This publication outlines the professional financial planner’s job, and explains the process of financial planning, but the term “financial plan” never appears in the publication’s text.

Financial Projections

A financial projection includes several alternative scenarios while a forecast is the single most likely scenario. Pro forma statements are used for a full range of financial analysis and should be created at the beginning of every financial planning cycle or whenever an organization is considering a step that could have a significant financial impact. They are often examined when a company is contemplating a merger, new financing (debt, stock, institutional subsidy, or external grant), capital investment in plant or other fixed assets, expanding production, launching a new product line, or any other situation with important financial implications. A university press most often uses proforma statements in connection with its annual operating budget and long-term financial planning process. Budgets and multi-year financial plans usually contain pro forma income statements and balance sheets to summarize financial performance for given time periods and financial conditions for given dates.