business plan profit and loss forecast template

How to Create a Profit and Loss Forecast

Angelique O'Rourke

7 min. read

Updated May 10, 2024

An income statement, also called a profit and loss statement (or P&L), is a fundamental tool for understanding how the revenue and expenses of your business stack up.

Simply put, it tells anyone at-a-glance if your business is profitable or not. Typically, an income statement is a list of revenue and expenses, with the company’s net profit listed at the end (check out the  section on income statement examples below  to see what it looks like). 

Have you ever heard someone refer to a company’s “bottom line”? They’re talking about the last line in an income statement, the one that tells a reader the net profit of a company, or how profitable the company is over a given period of time (usually quarterly or annually) after all expenses have been accounted for.

This is the “profit” referred to when people say “profit and loss statement,” or what the “p” stands for in “P & L.” The “loss” is what happens when your expenses exceed your revenue; when a company is not profitable and therefore running at a loss.

As you read on, keep in mind that cash and profits aren’t the same thing. For more on how they’re different,  check out this article .

What’s included in an income statement?

The top line of your profit and loss statement will be the money that you have coming in, or your revenue from sales. This number should be your initial revenue from sales without any deductions.

The top line of your income statement is really just as important as the bottom line; all of the direct costs and expenses will be taken out of this beginning number. The smaller it is, the smaller the expenses have to be if you’re going to stay in the black.

If you’re  writing a business plan  document and don’t yet have money coming in, you might be wondering how you would arrive at a sales number for a financial forecast. It’s normal for the financials of a business plan to be your best educated guess at what the next few years of numbers will be. No one can predict the future, but you can make a reasonable plan.

Check out this article about forecasting sales  for more information.

Direct costs

Direct costs, also referred to as the cost of goods sold, or COGS, is just what it sounds like: How much does it cost you to make the product or deliver the service related to that sale? You wouldn’t include items such as rent for an office space in this area, but the things that directly contribute to the product you sell.

For example, to a bookstore, the direct cost of sales is what the store paid for the books it sold; but to a publisher, its direct costs include authors’ royalties, printing, paper, and ink. A manufacturer’s direct costs include materials and labor. A reseller’s direct costs are what the reseller paid to purchase the products it’s selling.

If you only sell services, it’s possible that you have no direct costs or very low direct costs as a percentage of sales; but even accountants and attorneys have subcontractors, research, and photocopying that can be included in direct costs.

Here’s a simple rule of thumb to distinguish between direct costs and regular expenses: If you pay for something, regardless of whether you make 1 sale or 100 sales, that’s a regular expense. Think salaries, utilities, insurance, and rent. If you only pay for something when you make a sale, that’s a direct cost. Think inventory and paper reports you deliver to clients.

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Gross margin

Gross margin is also referred to as gross profit. This number refers to the difference between the revenue and direct costs on your income statement.

Revenue – Direct Costs = Gross Margin

This number is very important because it conveys two critical pieces of information: 1.) how much of your revenue is being funneled into direct costs (the smaller the number, the better), and 2.) how much you have left over for all of the company’s other expenses. If the number after direct costs is smaller than the total of your operating expenses, you’ll know immediately that you’re not profitable.

Operating expenses

Operating expenses are where you list all of your regular expenses as line items, excluding your costs of goods sold.

So, you have to take stock of everything else your company pays for to keep the doors open: rent, payroll, utilities, marketing—include all of those fixed expenses here.

Remember that each individual purchase doesn’t need its own line item. For ease of reading, it’s better to group things together into categories of expenses—for example, office supplies, or advertising costs.

Operating income

Operating income is also referred to as EBITDA, or earnings before interest, taxes, depreciation, and amortization. You calculate your operating income by subtracting your total operating expenses from your gross margin.

Gross Margin – Operating Expenses = Operating Income

Operating income is considered the most reliable number reflecting a company’s profitability. As such, this is a line item to keep your eye on, especially if you’re  presenting to investors . Is it a number that inspires confidence?

This is fairly straightforward—here you would include any interest payments that the company is making on its loans. If this doesn’t apply to you, skip it.

Depreciation and amortization

These are non-cash expenses associated with your assets, both tangible and intangible. Depreciation is an accounting concept based on the idea that over time, a tangible asset, like a car or piece of machinery, loses its value, or depreciates. After several years, the asset will be worth less and you record that change in value as an expense on your P&L.

With intangible assets, you’ll use a concept called amortization to write off their cost over time. An example here would be a copyright or patent that your business might purchase from another company. If the patent lasts for 20 years and it cost your company $1 million to purchase the patent, you would then expense 1/20th of the cost every year for the life of the patent. This expense for an intangible asset would be included in the amortization row of the income statement.

This will reflect the income tax amount that has been paid, or the amount that you expect to pay, depending on whether you are recording planned or actual values. Some companies  set aside an estimated amount of money  to cover this expected expense.

Total expenses

Total expenses is exactly what it sounds like: it’s the total of all of your expenses, including interest, taxes, depreciation, and amortization.

The simplest way to calculate your total expenses is to just take your direct costs, add operating expenses, and then add the additional expenses of interest, taxes, depreciation, and amortization:

Total Expenses = Direct Costs + Operating Expenses + Interest + Taxes + Depreciation + Amortization

Net profit, also referred to as net income or net earnings, is the proverbial bottom line. This is the at-a-glance factor that will determine the answer to the question, are you in the red? You calculate net profit by subtracting total expenses from revenue:

Net Profit = Revenue – Total Expenses

Remember that this number started at the top line, with your revenue from sales. Then everything else was taken out of that initial sum. If this number is negative, you’ll know that you’re running at a loss. Either your expenses are too high, you’re revenue is in a slump, or both—and it might be time to reevaluate strategy.

• Income statement examples

Because the terminology surrounding income statements is variable and all businesses are different, not all of them will look exactly the same, but the core information of revenue minus all expenses (including direct costs) equals profit will be present in each one.

Here is an income statement from Nike, to give you a general idea:

An  income statement from Nike .

As you can see, while Nike uses a variety of terms to explain what their expenses are and name each line item as clearly as possible, the takeaway is still the bottom line, their net income.

Angelique is a skilled writer, editor, and social media specialist, as well as an actor and model with a demonstrated history of theater, film, commercial and print work.

Table of Contents

• What’s included in an income statement?

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How To Create Financial Projections for Your Business Plan

Building a financial projection as you write out your business plan can help you forecast how much money your business will bring in.

Planning for the future, whether it’s with growth in mind or just staying the course, is central to being a business owner. Part of this planning effort is making financial projections of sales, expenses, and—if all goes well—profits.

Even if your business is a startup that has yet to open its doors, you can still make projections. Here’s how to prepare your business plan financial projections, so your company will thrive.

What are business plan financial projections?

Business plan financial projections are a company’s estimates, or forecasts, of its financial performance at some point in the future. For existing businesses, draw on historical data to detail how your company expects metrics like revenue, expenses, profit, and cash flow to change over time.

Companies can create financial projections for any span of time, but typically they’re for between one and five years. Many companies revisit and amend these projections at least annually. 

Creating financial projections is an important part of building a business plan . That’s because realistic estimates help company leaders set business goals, execute financial decisions, manage cash flow , identify areas for operational improvement, seek funding from investors, and more.

What are financial projections used for? 

Financial forecasting serves as a useful tool for key stakeholders, both within and outside of the business. They often are used for:

Business planning

Accurate financial projections can help a company establish growth targets and other goals . They’re also used to determine whether ideas like a new product line are financially feasible. Future financial estimates are helpful tools for business contingency planning, which involves considering the monetary impact of adverse events and worst-case scenarios. They also provide a benchmark: If revenue is falling short of projections, for example, the company may need changes to keep business operations on track.

Projections may reveal potential problems—say, unexpected operating expenses that exceed cash inflows. A negative cash flow projection may suggest the business needs to secure funding through outside investments or bank loans, increase sales, improve margins, or cut costs.

When potential investors consider putting their money into a venture, they want a return on that investment. Business projections are a key tool they will use to make that decision. The projections can figure in establishing the valuation of your business, equity stakes, plans for an exit, and more. Investors may also use your projections to ensure that the business is meeting goals and benchmarks.

Loans or lines of credit 

Lenders rely on financial projections to determine whether to extend a business loan to your company. They’ll want to see historical financial data like cash flow statements, your balance sheet , and other financial statements—but they’ll also look very closely at your multi-year financial projections. Good candidates can receive higher loan amounts with lower interest rates or more flexible payment plans.

Lenders may also use the estimated value of company assets to determine the collateral to secure the loan. Like investors, lenders typically refer to your projections over time to monitor progress and financial health.

What information is included in financial projections for a business?

Before sitting down to create projections, you’ll need to collect some data. Owners of an existing business can leverage three financial statements they likely already have: a balance sheet, an annual income statement , and a cash flow statement .

A new business, however, won’t have this historical data. So market research is crucial: Review competitors’ pricing strategies, scour research reports and market analysis , and scrutinize any other publicly available data that can help inform your projections. Beginning with conservative estimates and simple calculations can help you get started, and you can always add to the projections over time.

One business’s financial projections may be more detailed than another’s, but the forecasts typically rely on and include the following:

True to its name, a cash flow statement shows the money coming into and going out of the business over time: cash outflows and inflows. Cash flows fall into three main categories:

Income statement

Projected income statements, also known as projected profit and loss statements (P&Ls), forecast the company’s revenue and expenses for a given period.

Generally, this is a table with several line items for each category. Sales projections can include the sales forecast for each individual product or service (many companies break this down by month). Expenses are a similar setup: List your expected costs by category, including recurring expenses such as salaries and rent, as well as variable expenses for raw materials and transportation.

This exercise will also provide you with a net income projection, which is the difference between your revenue and expenses, including any taxes or interest payments. That number is a forecast of your profit or loss, hence why this document is often called a P&L.

Balance sheet

A balance sheet shows a snapshot of your company’s financial position at a specific point in time. Three important elements are included as balance sheet items:

• Assets. Assets are any tangible item of value that the company currently has on hand or will in the future, like cash, inventory, equipment, and accounts receivable. Intangible assets include copyrights, trademarks, patents and other intellectual property .
• Liabilities. Liabilities are anything that the company owes, including taxes, wages, accounts payable, dividends, and unearned revenue, such as customer payments for goods you haven’t yet delivered.
• Shareholder equity. The shareholder equity figure is derived by subtracting total liabilities from total assets. It reflects how much money, or capital, the company would have left over if the business paid all its liabilities at once or liquidated (this figure can be a negative number if liabilities exceed assets). Equity in business is the amount of capital that the owners and any other shareholders have tied up in the company.

They’re called balance sheets because assets always equal liabilities plus shareholder equity. 

5 steps for creating financial projections for your business

• Identify the purpose and timeframe for your projections
• Collect relevant historical financial data and market analysis
• Forecast expenses
• Forecast sales
• Build financial projections

The following five steps can help you break down the process of developing financial projections for your company:

1. Identify the purpose and timeframe for your projections

The details of your projections may vary depending on their purpose. Are they for internal planning, pitching investors, or monitoring performance over time? Setting the time frame—monthly, quarterly, annually, or multi-year—will also inform the rest of the steps.

2. Collect relevant historical financial data and market analysis

If available, gather historical financial statements, including balance sheets, cash flow statements, and annual income statements. New companies without this historical data may have to rely on market research, analyst reports, and industry benchmarks—all things that established companies also should use to support their assumptions.

3. Forecast expenses

Identify future spending based on direct costs of producing your goods and services ( cost of goods sold, or COGS) as well as operating expenses, including any recurring and one-time costs. Factor in expected changes in expenses, because this can evolve based on business growth, time in the market, and the launch of new products.

4. Forecast sales

Project sales for each revenue stream, broken down by month. These projections may be based on historical data or market research, and they should account for anticipated or likely changes in market demand and pricing.

5. Build financial projections

Now that you have projected expenses and revenue, you can plug that information into Shopify’s cash flow calculator and cash flow statement template . This information can also be used to forecast your income statement. In turn, these steps inform your calculations on the balance sheet, on which you’ll also account for any assets and liabilities .

Business plan financial projections FAQ

What are the main components of a financial projection in a business plan.

Generally speaking, most financial forecasts include projections for income, balance sheet, and cash flow.

What’s the difference between financial projection and financial forecast?

These two terms are often used interchangeably. Depending on the context, a financial forecast may refer to a more formal and detailed document—one that might include analysis and context for several financial metrics in a more complex financial model.

Do I need accounting or planning software for financial projections?

Not necessarily. Depending on factors like the age and size of your business, you may be able to prepare financial projections using a simple spreadsheet program. Large complicated businesses, however, usually use accounting software and other types of advanced data-management systems.

What are some limitations of financial projections?

Projections are by nature based on human assumptions and, of course, humans can’t truly predict the future—even with the aid of computers and software programs. Financial projections are, at best, estimates based on the information available at the time—not ironclad guarantees of future performance.

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• TemplateLab

Financial Projections Templates

34 simple financial projections templates (excel,word).

A financial projections template is a tool that is an essential part of managing businesses as it serves as a guide for the various team to achieve the desired goals. The preparation of these projections seems like a difficult task, especially for small businesses. If you can come up with financial statements , then you can also make financial projections.

Table of Contents

• 1 Financial Projections Templates
• 2 When do you need a financial projections template?
• 3 Business Projections Templates
• 4 What to include in financial projections?
• 5 Financial Forecast Templates
• 6 How do I make a financial projection?
• 7 Revenue Projection Templates

When do you need a financial projections template?

A financial projections template uses estimated or existing financial information to forecast the future expenses and income of your business. These projections don’t just consider a single scenario but different ones so you can determine how the changes in one part of your finances might affect the profitability of your company.

If you have to create a financial business projections template for your business, you can download a template to make the task easier. Financial projection has become an important tool in business planning for the following reasons:

• If you’re starting a business venture, a financial projection helps you plan your start-up budget.
• If you already have a business, a financial projection helps you set your goals and stay on track.
• If you’re thinking about getting outside financing, you need a financial projection to convince investors or lenders of the potential of your business.

Business Projections Templates

What to include in financial projections?

A financial projections template usually includes a few financial statements that will help you achieve better financial performance for your business:

• Income Statement Also called the Profit and Loss Statement , this focuses on your company’s expenses and revenues generated for a specific period of time. A typical income statement includes expenses, revenue, losses, and gains. The sum of all these is the net income, a measure of your company’s profitability.
• Cash Flow Statement Taking a look at a cash flow statement makes you understand how your company’s operations work. The statement explains in detail how much money goes in and out of your business in the form of either expense or income. This document includes the following: Operating Activities The cash flow from operating activities reports cash outflows and inflows from your company’s daily operations. This includes changes in accounts receivable, cash, inventory, accounts payable, and depreciation. Investing Activities You use the cash flows from investing activities for your company’s investments into the long-term future. This includes cash outflows for purchases of fixed assets like equipment and property and cash inflows for sales of assets. Financing Activities The financial activities in a cash flow statement show your business’ sources of cash from either banks or investors along with expenditures of cash you have paid to your shareholders. Total these at the end of each period to determine either a loss or a profit. The cash flow statement gets connected to the income statement through net income. To make this document, it requires the reconciliation of the two documents. You can calculate net profitability or income in the income statement which you then use to start the cash flow from the operations category in your cash flow statement.
• Balance Sheet This is a statement of your business’ liabilities, assets, and capital at a specific point in time. It details the balance of expenditure and income over the preceding period. This document provides you with a general overview of your business’ financial health. Here is an overview of these components: Assets These are your business’ resources with economic value that your business owns and which you believe will provide some benefit in the future. Examples of such future benefits include reducing expenses, enhancing sales, or generating cash flow. Assets typically include inventory, property, and cash. Liabilities In general, these refer to the obligations of your business to other entities. In more common terms, these are the debts that your business incurs in your daily operations. It typically includes loans and accounts payable. You can classify liabilities either as short-term or long-term. Owner’s Equity This is the amount you have left after you have paid off your liabilities. It is usually classified as retained earnings – the sum of your net income earned minus all the dividends you have paid since the start of your business.

Together with your break-even analysis and financial statements, you can include any other document that will help explain the assumptions behind your cash flow and financial forecast template.

Financial Forecast Templates

How do I make a financial projection?

The creation of a financial projections template requires the same information to use whether your business is still in its planning stages or it’s already up and running. The difference is whether you’re creating your revenue projection template using historical financial information or if you need to start from scratch.

This includes the creation of projections based on your own experiences or by conducting market research in the industry in which your business will operate. Here are some tips for creating an effective business plan financial projections template:

• Create the sales projection An important component of your business projections template is the sales projections. A business that’s already running can base its projections on its past performance, which you can derive from financial statements. When creating your sales projections, you must consider some external factors like the projected and current health of your company, if your inventory will get affected by additional tariffs, or if there is a downturn in your industry. Even if you want to remain optimistic about your business, you have to make realistic plans.
• Create the expense projection At the onset, the creation of an expense projection seems simpler because it’s much easier to predict the possible expenses of your business than it is to predict potential customers or their buying habits. If you have experience working in a certain industry, you can predict with some degree of accuracy what your fixed expenses are and any recurring expenses. But when it comes to one-time expenses that have the potential to bring down your business, these are much harder to predict. The best thing you can do in this scenario is to project expenses to the best of your ability then increase this value by 15%.
• Come up with a balance sheet for your financial projections template If you have a business that has been in operation for a couple of months, you can come up with a balance sheet using accounting software. The balance sheet shows your business’ financial status, listing its liabilities, equity, and assets balance for a certain time period. Use the current totals in your balance sheet when making your financial projections, In doing so, you will make better predictions on where your business will be a few years in the future. If you’re still in the planning stage of a business, you can create a balance sheet based on the data you’ve gathered from industry research.
• Create the income statement projection If you have a business that is currently in operation, you can create an income statement projection using your existing income statements to create an estimate of your business’ projected numbers. This is a logical move since an income statement provides a picture of your business’s net income after subtracting things like taxes, cost of goods, and other expenses. One of the main purposes of the income statement is to provide an idea of your business’ current performance. It also serves as the basis for estimating your net income for the next couple of years. If your business is still in the planning stages, the creation of a potential income statement shows that you have conducted extensive research and created a diligent and well-crafted estimate of your income in the next couple of years. If you have uncertainties on how to start creating an income statement projection, you can consult with market research firms in your locale. They can provide you with an overview of your targeted industry which includes target markets, expected and current industry growth levels, and sales.
• Come up with a cash flow projection The creation of this document is the final step leading to the completion of your financial projection. The cash flow statement is directly connected to the balance sheet and the net income statement, showing any cash-related or cash activities that can affect your industry. One of the purposes of this statement is to show how much money your business spends. This is a must for businesses obtaining financing or looking for investors. You can use this cash flow statement if your business has been in operation for a minimum of six months, but if your business is still in the planning stages, you can use the information you have gathered to create a credible projection. To make things easier for you, consider using spreadsheet software. Chances are, you’re already using spreadsheets. Using a spreadsheet will be the starting point for your financial projections. In addition, it offers flexibility that allows you to quickly judge alternative scenarios or change assumptions. Be as clear and reasonable as possible with your financial projections. Remember that financial projection is as much science as art. At some point, you will have to make assumptions on certain things like how administrative costs and raw materials will grow, revenue growth, and how efficient you will be at gathering accounts receivable for your business.

Revenue Projection Templates

More Templates

Business Budget Templates

Payment Schedule Templates

General Ledger Templates

Bill Pay Checklists

Collection Letter Templates

Personal Balance Sheets

• Costs and revenue management

Why is a profit and loss forecast important for businesses?

Financial planning and forecasting play a crucial role in ensuring the success and sustainability of a company. Without a clear understanding of future revenues and expenses, companies may struggle to make informed decisions, allocate resources effectively, and ensure sustainable growth. A powerful tool to tackle these challenges is the profit and loss forecast.

This article aims to shed light on the significance of a profit and loss forecast and its calculation and provide examples to help you understand its practical application.

Profit and loss forecast: definition

A profit and loss forecast is the projection of a company's anticipated financial performance over a specific period . By analysing historical data, market trends, and economic indicators, this forecasting tool empowers business owners to anticipate revenue, assess expenses, and determine the net profit or loss they may face.

This tool helps in forecasting profitability and plays a crucial role in cash flow management and liquidity planning . Providing insights into anticipated revenues and expenses, it enables businesses to proactively manage their cash flow , meet financial obligations, optimise resource allocation, and maintain a healthy financial position.

What are the elements of a profit and loss statement?

The profit and loss (P&L) statement, or income statement , summarises the following key elements or performance metrics of the company’s operations:

• Revenue/Sales: It is the total amount of money generated from the sale of goods, services, or other operating activities during a specific period.
• Cost of Goods Sold (COGS): These include the costs directly attributable to the production or acquisition of goods or services, such as raw material purchases, labour costs, and manufacturing overheads.
• Gross Profit : It is the difference between sales and COGS and represents the profit made before accounting for operating expenses.
• Operating Expenses: These encompass the non-production costs associated with running the daily operations, namely rent, utilities, and administrative costs.
• Operating Profit: It is the difference between gross profit and operating expenses and is representative of the profitability of the business’ core operations.
• Other Income and Expenses: These include gains and losses from the sale of assets, interest income/expense, taxes, etc. and aren’t pivotal to a company’s core.
• Net Income/ Loss: It represents the overall profit or loss earned by the company after accounting for all expenses.

See also: Balance Sheet Forecast: How-To

Profit and loss forecast example

Let us consider an example to understand a profit and loss forecast.

Sarah's Bakery, a popular local bakery, wants to evaluate the financial viability of expanding its product line to include gluten-free and vegan options. They create a profit and loss forecast specifically for the new product line.

The forecast includes projected revenues from the sale of gluten-free and vegan products, costs associated with ingredients, packaging, marketing, and additional staff. By analysing the forecast, Sarah's Bakery can determine if the expansion will generate sufficient profit and help them meet customer demands.

Profit forecast vs Profit and Loss forecast

In business terminology, a profit forecast and a profit and loss forecast are essentially the same thing. The terms "profit forecast" and "profit and loss forecast" are often used interchangeably to refer to a financial projection that estimates the expected profit or loss for a given period, typically a year.

What is the difference between profit and loss forecast and forecast?

The primary difference between a profit and loss forecast and a general forecast lies in their focus and scope .

A profit and loss forecast specifically centres around the financial performance of a business. This forecast is prepared using common accounting standards and is tailored to provide insights into the financial health and profitability of the company. It considers factors such as sales projections, production costs, operating expenses, and other revenue-generating or cost-incurring activities.

In comparison, a general forecast typically encompasses a broader range of predictions beyond financial aspects. It may include projections related to market trends, customer behaviour, industry growth, technological advancements, or any other relevant factors that impact the overall business environment.

A general forecast aims to provide a comprehensive outlook to guide decision-making, strategic planning, and resource allocation across various aspects of the business.

Cash flow forecast vs profit and loss forecast

While both cash flow forecasts and profit and loss forecasts are important financial tools for projecting business performance, they vary greatly as they are concerned with different aspects of the company.

A cash flow forecast provides a precise view of the company’s net cash position by projecting cash inflows and outflows over a specific period, including cash sales, customer collections, loan repayments, and more. It helps assess the company's liquidity and working capital management from a short-term perspective, typically on a weekly or monthly basis. By proactively identifying any cash shortfalls , it enables firms to timely meet their obligations.

Conversely, a profit and loss forecast estimates the firm’s revenues and expenses , and how much profit it has earned over a certain period of time. It is concerned with the company’s operational performance and provides insights into the company’s cost management and profitability. Unlike a cash flow forecast, it has a relatively long-term perspective.

How do you calculate profit and loss forecast?

To calculate a profit and loss forecast, you need to consider several key elements. Here's a step-by-step guide on how to calculate it:

Gather historical data: Collect relevant financial information from past periods, such as sales revenue, cost of goods sold, operating expenses, and other income or expenses. This data will serve as a foundation for estimating future performance.

Define the forecast period: Determine the timeframe for the forecast, whether it's monthly, quarterly, or annually. The length of the period may vary depending on the business's needs and industry.

Project revenue: Estimate the expected sales revenue for each period based on market trends, historical sales data, anticipated changes in customer demand, pricing strategies, and any upcoming product launches or promotions.

Estimate cost of goods sold (COGS): Calculate the direct costs associated with producing goods or services, including raw materials, labour, manufacturing expenses, and any other variable costs. This estimation should align with the projected sales volume.

Factor in operating expenses: Consider all operating expenses, such as rent, utilities, salaries, marketing expenses, insurance, and other administrative costs. Ensure they are accurately accounted for in the forecast.

Calculate gross profit: Subtract the projected COGS from the estimated revenue to determine the gross profit for each period. This represents the profitability before accounting for operating expenses.

Deduct operating expenses: Subtract the operating expenses from the gross profit to calculate the operating profit (also known as earnings before interest and taxes, or EBIT). This figure reflects the profitability after accounting for all operating costs.

Include non-operating income and expenses: Factor in any non-operating income (e.g., interest income, investment gains) or expenses (e.g., interest expense, foreign exchange losses) that may impact the overall profit or loss.

Calculate net profit/loss: Subtract non-operating expenses from non-operating income and add the result to the operating profit. This will provide the net profit or loss for each period.

Review and adjust: Evaluate the forecasted figures, considering any external factors like market conditions, regulatory changes, or business-specific circumstances. Revise the forecast as needed to ensure its accuracy and relevance.

What is the profit and loss forecasting model?

Various templates and software are available to simplify the process of creating a profit and loss forecast. These tools provide predefined categories and formulas that enable you to easily input your revenue and expense figures. An example of a template is given below.

How do you make a profit and loss forecast in Excel?

Microsoft Excel is a powerful tool that can be used to forecast profit and loss. Here's a step-by-step guide on how to forecast profit and loss using Excel:

Create a new Excel worksheet and set up a table with columns for Year, and rows for Revenue, Cost of Goods Sold, Operating Expenses, Other Income, and Net Profit. Alternatively, you can use the template given above.

Enter the forecasted revenue for each year in the Revenue row.

Calculate the cost of goods sold by entering the projected costs associated with production or delivery in the Cost of Goods Sold row.

Enter the forecasted operating expenses in the Operating Expenses row.

Include any other sources of income in the Other Income row.

Calculate the net profit by subtracting the total cost of goods sold and operating expenses from the revenue and adding any other income.

Format the table as desired and review the forecast for accuracy.

Refine the forecast by adjusting inputs and assumptions as needed.

Is profit and loss forecast included in a business plan of a new business?

Yes, a profit and loss (P&L) forecast is an essential component of a business plan and is included in its financial section. Serving as a financial roadmap, a P&L forecast demonstrates the new business’ profitability and viability to financial experts, which helps attract potential investors and lenders. It can also be used to benchmark the company’s actual performance after it becomes operational.

How to use your profit and loss forecast to make informed decisions and plan for the future

To gain actionable insights and make informed decisions based on your profit and loss forecast, take the following steps:

• Continuously monitor actual performance and compare it against the P&L forecast to identify variances.
• Analyse the causes of variation, including assumptions underlying revenue and expense projections, material changes in market and economic trends, and pricing effects.
• Conduct scenario planning and sensitivity analysis to understand the impact of differing circumstances on business performance and to better anticipate risks and opportunities.
• Follow it up by tweaking and realigning your financial targets with strategic goals for informed decision-making.

What are the main factors that affect a business's profit and loss forecast

There are several factors that impact a business’ P&L forecast, such as sales volume, pricing strategies, and cost structure. External factors like market conditions, economic events, seasonality, and the regulatory environment also affect financial forecasts.

How to monitor your actual performance against your forecast and adjust accordingly

Businesses must establish key profitability metrics, such as gross profit ratio, EBITDA margin, and net profit margin, to effectively monitor their actual financial performance. These figures are then compared against P&L projections to identify variances. For instance, if the operating profit falls short of expectations, analyse whether it is related to lower sales or higher costs and accordingly take corrective action. Eventually, the underlying assumptions can be changed in the event of permanent changes in the circumstances facing the business.

What are the limitations and challenges of profit and loss forecasting?

Profit and loss forecasting involves certain limitations, such as data limitations, complexities in assumptions, and a lack of control over external factors, which may result in projections being less than accurate. Businesses must also be cautious of data integration challenges and the role of human biases when reviewing P&L forecasts. The ultimate aim should be to strike a balance between accuracy and adaptability to make more informed decisions.

Key Takeaways:

Profit and loss forecasting is a resourceful tool to help you make informed decisions, allocate the limited resources effectively, and ensure your business's sustainable growth.

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Tim berry on business planning, starting and growing your business, and having a life in the meantime., standard business plan financials: projected profit and loss.

Continuing with my series here on standard business plan financials, all taken from my Lean Business Planning site, the Profit and Loss, also called Income Statement, is probably the most standard of all financial statements. And the projected profit and loss, or projected income (or pro-forma profit and loss or pro-forma income) is also the most standard of the financial projections in a business plan.

• It starts with Sales, which is why business people who like buzzwords will sometimes refer to sales as “the top line.”
• It then shows Direct Costs (or COGS, or Unit Costs).
• Then Gross Margin, Sales less Direct Costs.
• Then operating expenses.
• Gross margin less operating expenses is gross profit, also called EBITDA for “earnings before interest, taxes, depreciation and amortization.” I use EBITDA instead of the more traditional EBIT (earnings before interest and taxes). I explained that choice and depreciation and amortization as well in Financial Projection Tips and Traps , in the previous section.
• Then it shows depreciation, interest expenses, and then taxes…
• Then, at the very bottom, Net Profit; this is why so many people refer to net profit as “the bottom line,” which has also come to mean the conclusion, or main point, in a discussion.

The following illustration shows a simple Projected Profit and Loss for the bicycle store I’ve been using as an example. This example doesn’t divide operating expenses into categories. The format and math start with sales at the top. You’ll find that same basic layout in everything from small business accounting statements to the financial disclosures of large enterprises whose stock is traded on public markets. Companies vary widely on how much detail they include. And projections are always different from statements, because of Planning not accounting . But still this is standard.

A lean business plan will normally include sales, costs of sales, and expenses. To take it from there to a more formal projected Profit and Loss is a matter of collecting forecasts from the lean plan. The sales and costs of sales go at the top, then operating expenses. Calculating net profit is simple math.

Keep your assumptions simple. Remember our principle about planning and accounting. Don’t try to calculate interest based on a complex series of debt instruments; just average your interest over the projected debt. Don’t try to do graduated tax rates; use an average tax percentage for a profitable company.

Notice that the Profit and Loss involves only four of the Six Key Financial Terms . While a Profit and Loss Statement or Projected Profit and Loss affects the Balance Sheet because earnings are part of capital, it includes only sales, costs, expenses, and profit.

Hi, In case of bank financing for machineries and working capital, how can it be broken down in to the expense stream? ( capital + interest)

When you spend on assets is not deductible from income, and is therefore not an expense. What you spent to repay the principle of a loan is not deductible, and therefore not an expense. The interest on a loan is deductible, and is an expense.

Excuse me, may I know if the project profit & loss should plan for the first year only or for year 1-3 in business plan of a new company?

Kattie Wan, I recommend for normal cases the projected profit and loss monthly for the first 12 months, and two years annually after that. There are always special cases, though; every business is different.

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Financial Forecast in a Business Plan

Written by True Tamplin, BSc, CEPF®

Reviewed by subject matter experts.

Updated on September 12, 2024

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Table of contents, what is a financial forecast in a business plan.

A financial forecast in a business plan is a projection of the expected financial performance of a company over a specific period, often annually or quarterly. It provides insights into anticipated revenues, expenses, capital investments, and cash flows.

Rooted in both historical data and assumptions about future market conditions, this forecast helps stakeholders, including investors, lenders, and company leaders, gauge the business's potential profitability and financial health.

By comparing actual financial results with the forecast, businesses can identify gaps, make informed decisions, and adjust strategies accordingly.

Moreover, a well-constructed financial forecast demonstrates the company's understanding of its market and adds credibility to the business plan, increasing the likelihood of securing investments or loans.

In essence, it's a vital tool for planning, budgeting, and ensuring that a business remains on a sustainable financial trajectory.

Components of a Financial Forecast in a Business Plan

Sales and revenue forecast.

Businesses thrive on sales. Projecting future sales provides a cornerstone to any financial forecast. By analyzing market trends, past sales data, and growth strategies, businesses can predict revenue inflows.

This, in turn, dictates everything from inventory purchases to hiring strategies. In the ever-evolving marketplace, an accurate sales forecast is integral for optimal resource allocation and to prevent overhead costs that can cripple an enterprise.

Expense Forecast

As businesses strategize for growth, understanding expenditures becomes crucial. These can be both fixed, like rents and salaries, and variable, such as utility bills or raw material costs.

External factors like inflation, geopolitical scenarios, and supply chain disruptions can also influence business expenses. Therefore, an accurate expense forecast not only ensures sustainability but also charts out profitability margins.

Profit and Loss Statement (P&L Forecast)

Herein lies the essence of any business—profits. The P&L forecast provides a clear picture of the company's anticipated net profit or loss over a set period.

Distinguishing between gross profit, operational profit, and net profit helps streamline operations and understand where the bulk of revenues or costs stem from. A keen eye on this forecast can lead to timely interventions, ensuring financial stability.

Cash Flow Forecast

Cash is the lifeblood of a business. The cash flow forecast paints a picture of a business's liquidity by tracking both incoming and outgoing cash.

A well-managed cash flow ensures operational sustainability. A business might be profitable on paper, but if it lacks the liquidity to manage its immediate expenses, it can face significant hurdles.

Balance Sheet Forecast

A forward-looking balance sheet gives stakeholders a snapshot of a company's projected financial health, encompassing assets, liabilities, and owner’s equity.

Regularly updating and reviewing the balance sheet forecast can assist businesses in making informed financial decisions, whether it's taking on debt or making significant investments.

Capital Expenditure Forecast

For businesses looking towards expansion or major investments, the capital expenditure forecast is indispensable. It involves predictions related to expenses on assets that will benefit the business in the long run, like machinery, buildings, or technology.

Crucially, evaluating the potential return on these investments ensures that they generate value over time.

Importance of Financial Forecast in a Business Plan

Guide business strategies.

Financial forecasts are not just passive documents; they drive action. The insights derived from these forecasts shape a company's tactical and strategic decisions, ensuring alignment with financial expectations and goals.

Secure External Funding

For startups or businesses looking to expand, external funding often becomes essential. A robust financial forecast showcases the business's potential to prospective investors or lenders, bolstering its credibility and signaling its viability.

Risk Management

Financial projections serve as an early warning system. They highlight potential financial pitfalls, allowing businesses to devise countermeasures.

Whether it's diversifying sources of income, cutting down on non-essential expenses, or hedging against market volatility, these forecasts empower businesses to navigate challenges proactively.

Monitor Business Health

By juxtaposing actual financial outcomes with forecasts, businesses can gauge their performance. Discrepancies can lead to course corrections, ensuring that the business remains aligned with its broader financial and operational objectives.

Methods and Tools for Creating a Financial Forecast in a Business Plan

Quantitative methods.

Numbers often tell a compelling story. Time series analysis, econometric models, and other statistical tools provide a quantitative means to chart out a business's future. These rely heavily on historical data and established market trends to make informed predictions.

Qualitative Methods

Sometimes, numbers need a human touch. Techniques like the Delphi method or expert judgment pool insights from professionals to make predictions, especially when historical data might not be a reliable indicator.

While these methods might lack the objective precision of quantitative models, they provide valuable subjective insights, especially in rapidly evolving industries.

Modern Forecasting Tools

The digital age has democratized forecasting. Several software solutions, from simplistic spreadsheet templates to sophisticated AI-driven models, empower businesses to automate their financial forecasting processes.

Integration capabilities, real-time data processing, and advanced analytics further enhance their efficacy.

Challenges of Financial Forecast in a Business Plan

External economic factors.

While businesses can control their operations, external factors often remain unpredictable. Market volatilities, geopolitical events, or global crises can disrupt even the most meticulous forecasts, underscoring the importance of adaptability.

Internal Business Changes

Organizational restructuring, strategy pivots, or product launches can significantly alter a company's financial trajectory. Such internal changes necessitate regular revisions of the financial forecast to ensure it remains reflective of the business's evolving landscape.

Inherent Uncertainty

The future remains, by nature, uncertain. Even the most sophisticated forecasting models rely on assumptions and estimates.

Recognizing this inherent unpredictability, businesses should adopt a flexible approach, regularly revisiting their forecasts and adjusting them in light of new data or changing circumstances.

A financial forecast in a business plan is an indispensable tool that projects a company's future financial performance, derived from both historical data and future assumptions.

Essential components include sales and revenue predictions, expense projections, and comprehensive statements like the P&L and balance sheet forecasts.

The objective is not just to track figures but to guide strategy, secure funding, manage risks, and constantly monitor the company's financial health.

While modern tools and quantitative methods provide precision, qualitative insights capture the nuances of rapidly changing industries.

Challenges like external economic shifts, internal business alterations, and the inherent uncertainty of predicting the future underline the importance of flexibility and adaptability.

In essence, a robust financial forecast not only charts a course for a company's growth but also ensures it remains agile in the face of both expected and unforeseen challenges.

Financial Forecast in a Business Plan FAQs

Why is a financial forecast in a business plan crucial for startups.

A Financial Forecast in a Business Plan helps startups anticipate revenues and expenses, allowing them to strategize operations, secure funding, and ensure financial sustainability from the onset.

How often should a company update its Financial Forecast in a Business Plan?

While the frequency may vary depending on the industry and market dynamics, it's generally recommended to revisit and update the Financial Forecast in a Business Plan at least annually or when significant internal or external changes occur.

Can I create a Financial Forecast in a Business Plan without prior financial data?

Yes, startups and new businesses often rely on industry benchmarks, market research, and qualitative methods to create a Financial Forecast in a Business Plan, even without historical financial data.

How accurate is the Financial Forecast in a Business Plan?

While every effort is made to ensure accuracy, a Financial Forecast in a Business Plan is based on assumptions, projections, and available data. External factors and unforeseen changes can affect outcomes, making it essential to revisit and adjust forecasts regularly.

What tools can I use to automate the Financial Forecast in a Business Plan?

There are various software solutions, ranging from spreadsheet templates to sophisticated AI-driven platforms, designed to help businesses automate and enhance the accuracy of their Financial Forecast in a Business.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide , a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University , where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon , Nasdaq and Forbes .

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Profit and Loss Template

A Profit and Loss Statement is another name for the Income Statement . If you want to create a profit and loss statement, you can use our income statement template and change the title. The Profit and Loss Template below is used for creating a 3-year projection , or an estimate of how you expect your business to perform from year to year. The profit and loss projection template is based on our Business Budget Template and uses the same income and business expense categories.

If you'd like to perform a cash flow analysis, and are looking for a 12-month profit and loss template, try the 12-Month Business Budget Template . All you would need to do is change the title to "12-Month Profit and Loss Projection." You can also use the profit and loss template below for a monthly cash flow analysis by changing the column labels from years to months.

Profit and Loss Projection Template

Other versions, template details.

License : Private Use (not for distribution or resale)

"No installation, no macros - just a simple spreadsheet" - by Jon Wittwer

Description

The Profit and Loss Projection Template helps you create a 3-year projection of income and expenses for your business. It uses the same list of categories as the business budget , but also includes columns for calculating the Percentage of Total Sales , which helps you to analyze cost of goods sold and operating expenses.

This workbook contains two profit and loss templates designed for companies providing services or selling goods. The main difference is that the Goods worksheet includes a Cost of Goods Sold section for recording inventory and purchases and calculating Gross Profit.

Using the Profit and Loss Template

The difference between a business budget and a profit and loss projection is subtle, but important. After creating a profit and loss projection, you could simply change the title of your spreadsheet to "Budget". However, if you are like me, your budget will be much more conservative than your projection. A projection should be as realistic as possible.

The profit and loss template includes the same set of categories as the business budget, and information about income categories and expense categories can be found on the Income Statement and Business Budget pages.

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Financial statements.

5-Year Financial Plan Template

Whether you are already running a business, or making plans to start one up, financial planning is a vital part of ensuring your success. Not knowing your expected income and expenditure will make it difficult to plan, and hard to find investors.

This 5-Year Financial Plan spreadsheet will make it easy for you to calculate profit and loss, view your balance sheet and cash flow projections, as well as calculate any loan payments you may have. Whilst the wording on this spreadsheet is focussed around products, it can just as easily be used for businesses who largely provide services to their customers.

5-Year Financial Plan Projection

How to use Financial Plan

Model inputs.

Use the Model Inputs sheet to enter information about your business that will be used to model results seen on the other pages.

Forecasted Revenue

The forecasted revenue section allows you to estimate your revenue for 4 different products. Simply use the white boxes to enter the number of units you expect to sell, and the price you expect to sell them for, and the spreadsheet will calculate the total revenue for each product for the year. If you want to give your products names, simply type over the words "Product 1", "Product 2" etc. and these names will be carried through to the rest of the spreadsheet.

Cost of Goods Sold

Your margins are unlikely to be the same on all of your products, so the cost of goods sold allows you to enter your expected gross margin for each product into the white boxes in Column B. The spreadsheet will automatically calculate the annual cost of goods sold based on this information, along with your forecasted revenue.

Annual Maintenance, Repair and Overhaul

As the cost of annual maintenance, repair and overhaul is likely to increase each year, you will need to enter a percentage factor on your capital equipment in the white box in Column B. This will be used to calculate your operating expenses in the profit and loss sheet.

Asset Depreciation

Use the white box to enter the number of years you expect your assets to depreciate over. This may vary greatly from business to business, as assets in some sectors depreciate much more quickly than they do in others.

In most parts of the world, you will have to pay income on your earnings. Enter the annual tax rate that applies to your circumstances in the white box in Column B. If you have to pay any other taxes, these can be entered later on the Profit and Loss sheet.

Although you cannot be certain of the level of inflation, you will still need to try and plan for it when coming up with a 5-year financial plan. The International Monetary Fund provide forecasts for a number of countries, so is a good place to look if you are unsure what to enter here. Simply enter your inflation rate in the white box.

Product Price Increase

As a consumer, you are no doubt aware that the price of products goes up over time. Enter a number in the white box to show the expected annual price increase of your products to enable the spreadsheet to calculate income in future years. If you are unsure what to put here, increasing your product price in line with inflation is a good starting point. If your business is just starting out, you may be able to command higher prices for your products or services as the years go on, as you build up brand recognition and a good reputation.

The funding section allows you to enter information about your business loan. To use this section, simply fill in the three white boxes representing the amount of the loan, the annual interest rate and the term of the loan in months - for example, 12 for 1 year, 24 for 2 years, 36 for 3 years, 48 for 4 years, or 60 for a 5 year loan.

Profit and loss

This sheet calculates your profit and loss for each year over a 5 year period. The profit and loss assumptions, along with income, are automatically calculated using information entered in the model inputs sheet.

Non-Operation Income

You may have, or be expecting some income in addition to your operating income. These can be entered manually in the white cells in Column B for Year 1, Column C for Year 2 and so on. There are pre-entered categories for rental, lost income and loss (or gain) on the sale of assets, as well as an additional row where you can enter your own non-operation income.

Operating Expenses

Some parts of this are already filled in based on information you put on the Model Inputs, for example, depreciation, maintenance and interest on long-term debt. Years 2-5 are also filled in for you across all categories based on the inflation information entered in the Model Inputs sheet. You therefore only need to enter your Sales and Marketing, Insurance, Payroll and Payroll Tax, Property Taxes, Utilities, Administration Fees and any Other Expenses into the white cells in Column B for Year 1.

Non-recurring Expenses

This section is for entering any expenses that you will not be paying on an annual basis. The Unexpected Expenses row allows you to enter a contingency for unexpected expenses, whilst the Other Expenses row allows you to enter any other one off expenses you may be expecting to make, for example the purchase of new equipment part way into your 5 year plan.

Income Tax is filled in based on the information you enter into the model inputs. Depending on where your business is based, you may find yourself having to pay other taxes. These can be entered in the Other Tax row. You can rename this row by typing over the "Other Tax (specify)" text.

Balance Sheet

The annual balances for Years 1-5 are, in most cases, filled in for you, based on the information you have entered on the Model Inputs sheet and in the Initial Balance column of the Balance Sheet column itself. This makes it very easy to use.

Current Assets

This is where you can enter the value of any of your current assets, with spaces to enter information about Cash and Short-term Investments, Accounts Receivable, Inventory, Prepaid Expenses and Deferred Income Tax. At the bottom of this section is a space for you to enter any other current assets you may have that do not fall into any of these categories.

Property and Equipment

Depending on the nature of your business, you may have assets such as Buildings, Land, Capital Improvements and Machinery. Enter the value of these assets into Column B, and these values will be copied over to each of the 5 years of the plan. The depreciation information entered into the Model Inputs sheet will be used to calculate the depreciation expenses, which allows a total for property and equipment to be calculated automatically.

Other Assets

This section is for entering information on any assets that don't fit in the other sections. These could be Goodwill Payments, Deferred Income Tax, Long-term Investments, Deposits, or any Other long-term assets. Enter the information into Column B, and it will be carried across to the yearly columns automatically.

Current Liabilities

As well as assets, your business is likely to have liabilities. There are spaces to enter Accounts Payable, Accrued Expenses, Notes Payable and Short-term Debt, Capital Leases and Other current liabilities. Just leave blank any rows where you do not have any liabilities, and the totals will be calculated for you.

Your long-term debt/loan information will have already been entered in the Model Inputs sheet, so the only thing to do here is to enter any other long-term debt. Unlike much of the rest of the Balance Sheet, you can manually enter different amounts for each year, as you may, for example, be expecting to take on another loan to purchase some new equipment in Year 3 as your business expands.

Other Liabilities

Use this section to enter any liabilities not covered by the pre-defined labels. You can amend the text in Column A, in order to specify the liabilities, and then enter the cost of these liabilities in Column B.

Your business is likely to have some equity, and this can be entered into this section. You can fill out the Owner's Equity, Paid-in Capital and Preferred Equity in Column B. Your retained earnings are automatically calculated based on the Profit and Loss sheet.

Much of the information on the cash flow sheet is based on calculations in the Balance Sheet. It is important to plan your cash flow carefully, so that you know what funds you will have available to buy new stock and equipment.

Operating Activities

Much of this section is automatically filled in based on your balance sheet. There are only three rows to fill out, which are Amortization, Other Liabilities and Other Operating Cash Flow. You only need to fill out the white boxes in Column B for Year 1, as these values will automatically be carried over into subsequent years for you.

Investing Activities

Your capital expenditures and sale of fixed assets will be automatically populated if you have filled out the relevant sections of the Balance Sheet. They will be blank if they do not apply. As investing activities can vary year on year, you will need to fill out any investment activities for each of the 5 years in the appropriate columns for Acquisition of Business, and any Other Investing Cash Flow items.

Financing Activities

The long-term debt/financing row will be pre-filled based on the loan information previously entered. Use Column B to fill out your Preferred Stock, Total Cash Dividends Paid, Common Stock and Other Financing Cash Flow items for Year 1. This information will automatically carried over to Years 2-5.

Loan Payment Calculator

There is nothing to enter on this sheet, as it is for information only. Whether or not you already have a loan, or are using this spreadsheet as a part of a business plan to help you obtain one, it allows you to easily see how much you will be paying each month, showing how much you are paying off your loan, and how much you are paying in interest. This will allow you to get an idea of whether or not you can afford to borrow a bit extra, if you feel it would allow you to push your business into higher places, or whether you need to shop around for a better interest rate or adjust the loan term in order to afford the loan payments.

Related Templates

Access our collection of user-friendly templates for business planning, finance, sales, marketing, and management, designed to assist you in developing strategies for either launching a new business venture or expanding an existing one.

You can use the templates below as a starting point to create your startup business plan or map out how you will expand your existing business. Then meet with a  SCORE mentor to get expert business planning advice and feedback on your business plan.

If writing a full business plan seems overwhelming, start with a one-page Business Model Canvas. Developed by Founder and CEO of Strategyzer, Alexander Osterwalder, it can be used to easily document your business concept.

Download this template to fill out the nine squares focusing on the different building blocks of any business:

• Value Proposition
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• Customer Relationships
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• Key Partners
• Cost Structure
• Revenue Streams

For help completing the Business Model Canvas Template, contact a SCORE business mentor for guidance by phone

From creating a startup budget to managing cash flow for a growing business, keeping tabs on your business’s finances is essential to success. The templates below will help you monitor and manage your business’s financial situation, create financial projections and seek financing to start or grow your business.

This interactive calculator allows you to provide inputs and see a full estimated repayment schedule to plan your capital needs and cash flow.

A 12-month profit and loss projection, also known as an income statement or statement of earnings, provides a detailed overview of your financial performance over a one-year period. This projection helps you anticipate future financial outcomes by estimating monthly income and expenses, which facilitates informed decision-making and strategic planning. 

If you’re trying to get a loan from a bank, they may ask you for a personal financial statement. You can use this free, downloadable template to document your assets, liabilities and net worth. 

A Personal Financial Statement is a snapshot of

Marketing helps your business build brand awareness, attract customers and create customer loyalty. Use these templates to forecast sales, develop your marketing strategy and map out your marketing budget and plan.

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Free Small Business Profit and Loss Templates

By Andy Marker | February 15, 2022

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We’ve compiled a comprehensive list of profit and loss templates for small businesses. Each template is free, printable, and ready to download and edit. 

Included on this page, you will find a basic profit and loss template , a sample annual profit and loss statement , a profit and loss dashboard , and profit and loss templates organized by small business type.

General Profit and Loss Templates for Small Business

Simple profit and loss statement.

Download Simple Profit and Loss Statement   Microsoft Excel | Microsoft Word | Adobe PDF

This simple profit and loss statement template is available in multiple formats and includes sections for calculating business income and expenses within a customizable time frame. Example expenses include staff wages, office rent, utilities, insurance costs, supplies, and taxes. Use this template to create an itemized list of business expenses and review total net income.

Monthly Profit and Loss Template

Download Monthly Profit and Loss Template — Microsoft Excel

Create a 12-month profit and loss statement that tracks monthly and year-to-date expenses and revenue. After entering your data into the spreadsheet, the template will calculate totals and generate graphs that display gross profit, total expenses, and profit or loss over time. This template includes sample line items with common small business expenses and revenue sources. For added convenience, the spreadsheet groups expenses into categories, such as employee payroll, banking, overhead expenses, vehicle costs, and taxes.

Annual Profit and Loss Template Sample

Download Annual Profit and Loss Template Sample — Microsoft Excel

Use this template to create a pro forma income statement for annual financial projections or to complete a year-over-year profit and loss analysis. For increased efficiency, this template includes sample data for a small business, including gross sales, cost of sales, operating expenses, and net income before and after taxes.

Quarterly Profit and Loss Statement

Download Quarterly Profit and Loss Statement — Microsoft Excel

This blank profit and loss statement allows you to record quarterly financial data over one year. The template layout is simple and intuitive, including sections for tracking business revenue, expenses, and tax information. Enter your company name, income sources, discounts or other allowances, business expenses, and tax details. The template will automatically calculate subtotals and total net income.

Profit and Loss Dashboard Template

Download Profit and Loss Dashboard Template — Microsoft Excel

Oversee monthly profit and loss information for your small business with this dashboard template. The charts included on the template display total income, cost of goods sold, gross profit, total expenses, earnings before interest and taxes (EBIT), and net revenue before and after taxes. Use this template to compare financial details between previous and current months and give stakeholders a snapshot of monthly income performance.

Profit and Loss Templates by Business Type

Self-employed profit and loss template.

Download Self-Employed Profit and Loss Template — Microsoft Excel

Designed for independent contractors and other self-employed individuals, this profit and loss statement includes fields for recording income from multiple clients, tax costs, and business expenses. After you enter income received from each client, the template subtracts expenses and taxes to calculate net income. Use the example list of expenses to tailor your profit and loss statement to your small business.

Hotel Profit and Loss Statement

Download Hotel Profit and Loss Statement Microsoft Excel | Google Sheets

This template uses a basic profit and loss statement format to help you track hotel revenue and expenses. Assign each item a reference number and record all income sources and expenses in the appropriate fields. By doing so, you can closely monitor all profits and losses for your hotel or other hospitality business.

Daycare Profit and Loss Statement

Download Daycare Profit and Loss Statement Microsoft Excel | Microsoft Word | Adobe PDF

Use this template to track finances for your daycare business. Record income information, such as payments for classes, monthly fees, and donations. In addition, record expenses, such as food, art supplies, toys, rent, utilities, and wages. The template automatically calculates net profit or loss for whatever time period you choose.

Rental Property Profit and Loss Template

Download Rental Property Profit and Loss Template — Microsoft Excel

Compile financial information for multiple rental properties into one profit and loss statement. This comprehensive template includes sections for recording property details, deposits received, and rental income. List ongoing expenses, such as landscaping and property management fees, for each month of the year. Track one-time expenses separately, listing the date, total amount paid, and other details. Real estate agents can modify this template to create a profit and loss statement template for their small business.

Restaurant Profit and Loss Template

Download Restaurant Profit and Loss Template — Microsoft Excel

This restaurant profit and loss statement provides example sales items, labor costs, and other common restaurant revenue sources and expenses. Common revenue sources include food and beverage purchases and merchandise, while common expenses cover marketing costs, utilities, appliance repairs, depreciation, and administrative and labor costs. For simplicity, the template breaks down labor expenses into salaries, hourly wages, and employee benefits. The template also calculates total sales, gross profit, total expenses, and net income.

Construction Profit and Loss Template

Download Construction Profit and Loss Template Microsoft Excel | Google Sheets

View monthly and annual financial data with this construction profit and loss spreadsheet. Enter your monthly revenue for each client or project and list job costs such as labor, materials, equipment rentals, and dump fees. Add overhead expenses, from advertising and professional memberships to vehicle costs and small tool purchases. This template automatically calculates monthly totals and clearly displays profit and loss information for easy reference.

Salon Profit and Loss Template

Download Salon Profit and Loss Template Microsoft Excel | Google Sheets

This profit and loss template includes common hair salon sales items and expenses. Determine gross profit by totalling your revenue from salon services, retail sales, and rental income and subtracting the total cost of expenses. For clarity and accuracy, itemize all salon expenses, including marketing costs, utilities, subscriptions, business licenses, insurance costs, and all other operating expenses. Download the Excel spreadsheet for automatically calculated totals, or choose the PDF form to perform manual calculations.

Landscaping Business Profit and Loss Template

Download Landscaping Business Profit and Loss Template Microsoft Excel | Google Sheets

Using a simple, 12-month spreadsheet format, this template allows you to track the gross profit and net income for a landscaping business. Enter all revenue from landscaping clients, along with business expenses such as labor, fuel, equipment rentals, tools, vehicle expenses, and advertising costs. This template calculates subtotals and net profits or losses for each month and for the year.

What Is a Profit and Loss Template?

Also referred to as an income statement template or statement of operations template , a profit and loss template calculates business profits or losses by subtracting costs and expenses from income.  

Small business owners can use profit and loss statements to measure business performance on a monthly, quarterly, or annual basis. Along with other financial documents, such as balance sheets and cash flow statements , a profit and loss statement template helps to facilitate accurate financial tracking and to predict future business performance. 

To learn how to create a profit and loss statement in Excel with step-by-step instructions, visit our tutorial.

For related financial templates, see our collection of free small business budget templates and expense templates.

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Free Profit and Loss Forecast Template – Income Statement

The well functioning of a firm indisputably depends on the up to date documentation of the present income as well as the expected profit and loss. A profit and loss forecast report is the illustration of the health of the business at a given time. It is a forecast of income from sales after deducting all the expenditure. The calculated data is stored in the form of templates that can serve as the starting point for a new document. That is, a given template will include a pre-formatted setup, which can be further edited accordingly, to add or cut out texts. Among the forecast templates, a projected profit and loss statement template is the most essential one and the availability of the same, free of cost is one of the most admired innovations in the world of accounting.

Financial forecasting

Financial forecasting is a crucial step in the development of any particular business firms. It is the process of estimating and predicting the future sustainability of a business. It helps to determine the current stature as well as the expected progress of a company in the foreseeable future. Moreover, it enables the company to improvise its decision making capability, to decipher and exploit the latest trends and thereby to provide better performance. An example of financial forecasting is the method of predicting revenue of a business. Forecasting enables entrepreneurs to foresee and execute the expansion of resources. 

Profit and loss (Income statement) forecast report

To keep it simple, a profit and loss forecast report primarily depict the level of progress and sustainability of a particular business. Furthermore, it helps to understand the rate of success or failure of the establishment. That is, at the end of the day, if the income is more than that of the expenditure, then the firm is assumed to be in profit, whereas if the income is less than that of the expenditure, it is in a loss. Therefore, it is a financial report that illustrates the overall income, total cost of production, further expenses and also the net income over a given time. 

Content of P&L forecast template

The forecast report is documented with the help of a template in which the required headings and formulae are already arranged precisely. The mere addition of data will help the user to produce a forecast report. The content of P&L forecast template , From top to bottom, will include a header block, a revenue section, the cost of goods sold section and a general and administrative. In addition to this, there is an income and profit or loss section. The template, from left to right, encapsulates description line items, and a column of period totals (namely a month, a quarter or a year) for the account aggregations.

To substantiate, a profit and loss forecast template would mainly include,

The statement begins with the overall income acquired during the given period. In the P&L, revenue is showed when it is to be paid rather than when it is paid. The forecast for revenue includes finding methods to model revenues with a high degree of accuracy and details. Another quick way is more straightforward and depends on historical trends but is less accurate and detailed. 

• Expenditure

This is a summary of all the indirect expenses related to the enterprise. Forecasting selling, General and administrative costs is expressed in percentage of revenues. This will vary over short periods hence is calculated over longer intervals.

• Cost of goods sold   

This includes the direct costs which refer to the cost of production and services. This is documented when the transaction occurs and is not delayed until the cash is paid.

• Gross profit and Gross margin

Gross profit is the measuring scale of the progress attained by a business. If the gross profit is less, then an increase in the price debited for the products and services as well as a decrease in the expenditure is essentially required. The greater the gross profit, the more the financial growth and the higher the ability to tackle any unexpected circumstances in the business field. In the P&L forecast, gross profit is a good indicator of the sustainability of a business.

Gross profit=Total income-Direct costs

Gross margin is forecasted in the terms of percentage of revenues, based on historical figures or trends.

• Operating expenses(OPEX)

This embodies the cost of operation of the business which may include expenses like insurance, advertising, salaries etc. Thus operating expenses is a summary of the day to day expenditure of a business establishment.

• Depreciation

This calculates the decline in the value of the firm within the given time.

• Operating profit

Operating profit is the result of operating expenses deducted from gross profit. To put it another way, it is the overall income from a venture, keeping apart the operational expenses. However, it does not consider any finance costs and income. As the operating profit includes the depreciation, it gives a clear picture of the company’s present financial state. Moreover, it also helps to compare the progress with that of other similar firms.  

• Earnings before interest and tax (EBIT)                                    Subtraction of the operating expenses and direct costs from revenue would give a clear picture of the earnings before interest and tax.
• Finance costs and income.

It is the calculation of net profit or loss from different sectors of the establishment, which does not require any cost of operation.

• Earnings before tax(EBT)

The subtraction of direct costs, operating expenses, and depreciation from the total income would result in the earnings before tax. In the P&L forecast tax, documentation occurs when the tax is accrued.

      10.Net income

The net income is calculated by deducting the indirect expenses from the gross profit. Whether a loss or profit, this is the base of a financial statement. In the case of the profit, it is the positive financial outcome of the advancement obtained. It is used by the external organizations to decide the risks related to the venture.

      11.Dividends and retained surplus

          Profit is not the endpoint of a P&L forecast. After calculating    

profit, the dilemma of whether the sum should have been reinvested in the business or should be shared between the investors exists. The former is retained surplus whereas the latter is called dividends. In addition to this, cumulative retained surplus refers to the profit obtained from this month and the bygone months after the tax and dividend. 

Free templates for P&L forecast

Free templates for P&L forecast reports are now available in the market. Some well-known types are Google sheets and excel. There is a huge list of business websites which provides free P&L forecast templates. Normally, these templates are mobile-friendly. Moreover, they feature one page and multi-page setups. In the situations demanding a need for templates for a fresh venture or to re-customize the current model, the free templates will help the entrepreneur to cover their need without much cost. These free templates are easy to handle coupled with an option for individual touch-ups. The templates can be modified by adding the name of the company and the logo. Thus it can be shared to investors, partners and other financial organizations as well. 

                             As a free P&L forecast template will encapsulate a spreadsheet with the column headers as revenue streams, expense types etc along with the date, it will help the companies to keep an up to date bookkeeping. It makes the whole process a lot easier. Furthermore, since the templates are pre-formatted with the required headers and formulae, the forecasting will take relatively lesser time and effort. Subsequently, it avoids the hectic task of dealing with a handful of bills and documents. The template demands only a data input, which will be later processed by the template to create the final statement. The processor is capable of calculating the revenue, gross profit, EBIT, EBT etc. At the end of every month, the sum could be calculated to create a profit and loss forecast report. 

                            Several web and mobile accountings apps are generating free templates for profit and loss forecasting. This includes the apps which assist relatively smaller or medium ventures. For example, applications like Xero, QuickBooks, and Freshbooks .  These templates are capable of automatically processing the data and adding them to the statement, estimating the net income before and after taxation and storing the data related to bills and receipts. Most often, it is coupled with advanced features like time tracking. 

                          An easy way to use the free templates to forecast the profit and loss is to,

• Add the forecasted values to each section.
• Add or subtract the expenses related to the business.
• Check the values automatically calculated by the template.
• Add duplicate sheets in case of comparing different scenarios.
• Check the total revenue, gross profit, operating profit and the net profit calculated by the processor.

       Normally, the forecast template is available in different types. The monthly P&L forecast template is designed for the establishments demanding frequent and regular reporting. This can be used for small, medium and even large firms. The annual P&L forecasting templates are suitable for companies that are in the working phase for several years. 

Free profit and loss forecast template for small businesses

This kind of templates can be utilised for the forecasting of small businesses, which may include only a moderate range of sums to be calculated. The template comprises space to show income and deduction of CoGS in the income section, whereas, it includes wages and benefits and other similar categories in the expense section. This kinds of template are suitable for establishments which may mainly concentrate on retails and services.

Free profit and loss forecast template for big business

(For example, restaurants)

This kind of template could be used where there is a large sum of profit and loss to be forecasted. In the case of food services, tracking the production of food products and beverages is essential. Thus, this template includes sections for multiple food products in both the sales and CoGs sections. 

Free profit and loss forecast templates for personal uses

Another important use of free templates is to forecast the monthly or annual expense in a household or for a particular person. This kind of template helps to provide a general outlook of the money spent on daily necessities, products and services.

To put it in a nutshell, there are different varieties of forecasting templates available in the market. These templates would be specially designed for particular causes like small scale businesses, large scale businesses or personal uses. The utilisation of these templates helps to reduce the difficulties related to regular bookkeeping and can be solved up to an extent with the help of free templates. The free profit and loss forecasting templates enable a company to foresee the profits, losses and thereby to make necessary developments. Thus, the different websites and apps providing a plethora of free profit and loss forecasting templates are a boon to the accounting world.   

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Home » Management Templates » Free Editable Projected Income Statement Template

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Free editable projected income statement template.

Whatever is the scale of business, what matters is how much profit it gives at the end of the day. Companies keep track their income and expenses with projected income statement template for a certain period depending on the scale of business e.g. shopkeepers do a calculation of what they have spent and what they have earned at the end of each day while in large cooperate sectors monthly closing schemes are followed by accounts department for evaluating the performance of a business.

Income Statement shows income, expenses, and net income or loss of business for a specific time. This can be done daily, weekly, monthly, quarterly, semi-annually, or annually depending on company scale and policies. Usually for developing business, owners prefer to monitor business statements weekly it helps to evaluate business performance. You can also like Quickbooks deposit slip template .

The income projection template is an estimate of the financial results of the business in a future time. It’s often presented in the form of an income statement. Statistical tools are applied to historical data to forecast future incomes.

Table of Contents

Strategies to make the best income plans

For making the projected income statement of a business, different statistical forecasting methods are used to get estimates of future sales. The following are the four types of forecasting methods used by analysts for the estimation of future sales and variable costs of business. You can also see the production schedule template excel .

• Straight Line Method
• Moving Average Method
• Simple Linear Regression Method
• Multiple Linear Regression Method
• Following are the key elements of the income statement should present,
• Total Sales or Revenue
• Total Expenses or Costs (Variable and Fixed)
• Contribution Margins
• Net Income (Profit or Loss)

Read about the Income statement .

For making projected income statement template excel spreadsheets are used most commonly. After getting projections of future sales and expenses one can easily make projected income statements out of it.

Simple Projected Income Statement Template Pdf

Projected Income and Expenditure Statement Template

Projected Profit and Loss Statement Template Excel

Projected Profit and Loss Statement Example

Projected Financial Income Statement Template

Projected Profit and Loss Statement Template

How lengthy the projected income statement sheet is, it depends on the nature of the business and forecasting method adopted to predict future projections. Projected income statements can be very simple to complex based on how many variables are taken into consideration. Income statements are also sometimes referred to as profit and loss statements.

One good Projected Profit and Loss Statement Examples investment feasibility analysis. It is performed by investors before investing in a business. It utilizes the historical performance of the business to predict future profit and loss using forecasting methods. You can also check a simple project management template excel .

Listed are strategies to make the Projected Profit and Loss statement template using the excel spreadsheet,

• At the top mention time for which income statement is under construction.
• Write down the total sales revenue value in the next row.
• Enlist breakups and total of all variable costs like raw material cost, electricity cost, maintenance cost, and another administrative cost.
• Write down contribution margins in the next row. Contribution margin is calculated as CM = Total Revenue – All Variable Costs
• Enlist breakups and total of all fixed costs like salaries, rental payments, depreciation, interest, and taxes.

To calculate net income (Profit or Loss), subtract fixed costs from contribution margins. Just to evaluate if Net Income results as a positive value it’s a profit while negative value reflects loss equivalent to the resultant amount.

Repeat all the above steps for historical periods which are used to forecast projections and for projected data of future time.

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I am Ryan Duffy and legal writer. I received a bachelor of business administration (BBA) degree from London Business School. I have 8+ years of writing experience in the different template fields and working with ExcelTMP.com for 7 years. I work with a team of writers and business and legal professionals to provide you with the best templates.

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Small business profit and loss forecasts and templates

Learn about small business profit and loss forecasts. ANZ can help you with business tools and templates. Contact us to today find out more.

2024-01-29 00:00

• Use financial forecasting forecast to make predictions over the coming financial year
• Have a clear expectation of your income, cost of goods sold, and expenses

Get started with our profit and loss template

Our profit and loss template will help you with financial forecasting for the year ahead. Set yourself up for business success by having a clear expectation of how much you will make and the expenses you will incur during the coming 12 months.

Use our profit and loss template

Financial forecasting is used to predict profit and losses over the coming financial year.

Alongside your balance sheet and cash flow statement, financial forecasting is one of the key elements of setting up your business financially. 

Download our  Profit and loss template (xls 1.5MB)  to start your financial forecasting for the year ahead.

Begin by focusing on predictions for next month for each of the key sections: income, cost of goods sold and expenses. Then continue estimating your sales and expenses for the next six or 12 months.

The first part of financial forecasting involves predicting sales.

Begin by focusing on next month:

• Enter your predicted sales for the upcoming month
• Add any sales returns you usually have
• Factor in any discounts to be applied

Continue inputting any additional income streams you may have. The template will automatically make the calculations for you, so enter each amount as a positive number.

Cost of goods sold

Next, enter your stock level at the start of the month and add stock purchases plus other costs associated with your goods. 

Input your predicted stock level for the end of the month. The template will calculate the estimated total cost of goods sold and gross profit for the month.

The bottom half of the template deals with expenses – your selling, administrative and finance expenses. Navigate down the list entering all relevant expenses, which will be calculated by the template.

Input any interest expenses and hire purchase charges to calculate your profit before tax. Lastly, enter the estimated tax you’ll pay for the month and your net profit will be calculated at the bottom.

The last column will total all your monthly sales, expenses, interest and tax data into a half-year or annual amount. 

Lastly, calculate your likely expenses over the appropriate period of time.

Download our Profit and loss template (xls 1.5MB)  to start your financial forecasting for the year ahead.  

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Advice and Ideas for UK Small Businesses and SMEs

Profit and loss template

Our profit and loss template is available to companies with under and over £77,000 in turnover per annum

Use this template to build your own profit and loss account as a small business owner.

A profit and loss account (P&L) template is important whether you are running a business or in the process of setting one up.

If the latter, as a part of P&L forecasting, it forms a required part of a business plan .

A P&L account will show you what your business’ income and expenses are so you have a clearer idea of your trading history over a certain period of time.

What is a profit and loss template?

A P&L template shows:

• Business performance over a specific period of time
• Recorded incomings and outgoings
• Sales income generated, including estimates of work in progress but not yet invoiced.

A P&L statement is usually prepared annually and shows revenues and costs and how much profit has been made over the period. “This timeframe provides a comprehensive view of your business’ financial performance and allows for adjustments based on yearly cycles and market changes,” said Harvey Morton, founder of Harvey Morton Digital .

It should form part of your overall bookkeeping set of documents – along with a balance sheet and cashflow forecast.

For limited companies , and sole traders earning over £50,000 a year, a profit and loss statement is required for HMRC.

It’s not just a legal box-ticking exercise either. It’s insightful for you. “In the current economic climate, this forecasting process can be vital in giving business leaders the oversight needed to confidently make decisions about profitability and planning for future budgets and financial scenarios in the long term,” said Oliver Finch, business outsourcing partner at  Menzies LLP .

Why do I need a profit and loss document?

When it is completed properly a P&L paints a clear picture of your company’s financial performance, according to Michael Baron, commercial director of BWS : “Despite the name, a P&L goes far beyond showing the profit and loss; it shows how efficiently that company generates revenue and manages its expenses,” he told Small Business . “A P&L document is vital for internal decision-making and future growth, as well as playing a key role in external communication with investors, creditors and regulators by showing a company’s financial health.”

What should be in my profit and loss document?

A profit and loss statement will typically be made up of three main sections:

• Revenue (Sales): This section shows the total income generated by the business from selling its products or services.
• Cost of goods sold (COGS): This section reflects the direct costs associated with producing the goods or services sold. It includes raw materials, labour, and other expenses directly tied to making the product.
• Selling, general and administrative (SG&A): This includes expenses related to marketing, advertising, rent, salaries that aren’t included in COGS, utilities, and other general operating costs.
• Research and development (R&D): This reflects expenses on developing new products or services.
• Interest Expense: This includes any interest paid on loans or other forms of debt.
• Taxes: This section shows the amount of income tax the company owes.

How long should my profit and loss statement be?

There’s no set page length for a profit and loss statement, explains Baron. What really matters is that it is concise and informative, striking a balance between showing enough detail and being easy to understand. “Many P&L statements fit on a single page, but some may require two pages depending on the complexity of the business,” he said.

What matters even more than length is the level of detail included. “A profit and loss forecast should take into account major revenue and expense categories but avoid excessive items that clutter the bigger picture,” said Baron. “The detail may also vary depending on the audience. For example, an internal management P&L may require a more detailed breakdown, whereas investors would prefer a simplified version.”  

For those companies that experience seasonal variations, it’s advisable to also forecast on a quarterly basis, advises Jonathan Cooper, founder and director of  The Director’s Helpline . “This approach helps in managing cashflow during leaner quarters, ensuring that regular overheads are covered even when revenue is lower,” he said.

Use the templates below to build your own profit and loss account.

PDF profit & loss account template examples

• Click here to download the profit and loss PDF template for companies with under £77,000 turnover. Click here to download the profit and loss PDF template for companies with over £77,000 turnover.

XLS template examples

• Click here to download the profit and loss XLS template for companies with under £77,000 turnover. Click here to download the profit and loss XLS template for companies with over £77,000 turnover.

The templates have been produced to be in line with HMRC reporting requirements for self-employed professionals. The numbers are for illustration purposes only and completely random.

Here’s a bit more detail about each element.

All income from sales should be added for the period the P&L is being prepared for, whether or not your have received payment.

Sales with no received payment should be added to the debtors account in your balance sheet.

Cost of sales

Includes any direct costs involved in making and selling the product purchased, including the wages of  those involved in making the product and purchases made from suppliers for goods or raw materials used in the accounting period.

Includes general expenses and all other costs you have been invoiced for during the period, such as: rent, rates, professional fees, vehicle costs, national insurance and pensions, utilities, etc. Items invoiced for, but not yet paid, are added to your creditors account on your balance sheet.

Depreciation

It is a judgment call on how long a period fixed assets should be depreciated over but be consistent in your application of it.

Looking to easily track you profits and losses anywhere and anytime?

Further reading on accounting and managing cashflow.

• How to manage your accounts as a small business
• How the perception of accounting is changing
• Calling in your debts and chasing late payments 

Looking for finance? SmallBusiness.co.uk is working in partnership with trusted lenders to help you find the best business funding deals. Find out more here .

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Business Plan Profit And Loss Template

Download this Business Plan Profit And Loss Template Design in Word, Google Docs, Excel, PDF, Google Sheets, Apple Pages, Apple Numbers Format. Easily Editable, Printable, Downloadable.

Project profit and loss for your business plan effectively with the use of this industry-standard business plan profit and loss template. This is a template you can easily modify and edit to your company specifications. Just follow the prepared outline for a swift preparation of your business plan’s estimated profit and loss statement. This template is downloadable in various file formats on your PC or mobile device applicable to your preferred software.

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Online Profit And Loss Dashboard Example: P&L Template

• Written by: Agnese
• Published: September 17, 2024
• Last update: September 16, 2024

Discover other dashboards

A well-designed online profit and loss dashboard can be a game-changer for businesses. By visualizing key metrics, you can quickly assess your financial health and make data-driven decisions.

An online profit and loss (P&L) dashboard is a powerful tool that can provide you with real-time insights into your company’s revenue, expenses, and overall profitability.

This article will explore the essential components of a P&L dashboard and provide a practical example to help you get started.

Before you jump in... Looking to create reporting system fast & painlessly? Check our latest Ajelix BI platform for easy data analytics to help you make data driven decisions.

Give it a go

What is a profit and loss dashboard?

A profit and loss (P&L) dashboard is a visual representation of a company’s financial performance. It provides a clear and concise overview of revenue, expenses, and overall profitability. By presenting financial key performance indicators (KPIs) in an easily digestible format, P&L dashboards help businesses:

• Monitor financial health: Track revenue growth, expense control, and profit margins.
• Identify trends: Spot patterns and anomalies in financial data.
• Make informed decisions: Use data-driven insights to optimize operations and improve profitability.

Typically, a P&L dashboard includes metrics such as:

• Revenue: Total income generated from sales.
• Cost of goods sold (COGS): The direct costs associated with producing or selling products.
• Gross profit : Revenue minus COGS.
• Operating expenses: Indirect costs related to running the business.
• Operating profit: Gross profit minus operating expenses.
• Net profit : Operating profit plus or minus other income and expenses.

Key Metrics Visualized on a Profit and Loss Dashboard

A profit and loss (P&L) dashboard typically visualizes the following key metrics:

Revenue Metrics

• Total Revenue: The overall income generated from sales.
• Revenue by Product/Service: A breakdown of revenue based on different offerings.
• Revenue by Region/Market: Revenue performance across geographical areas.

Expense Metrics

• Cost of Goods Sold (COGS): Direct costs associated with producing or selling products.
• Operating Expenses: Indirect costs related to running the business (e.g., salaries, rent, utilities).
• Selling, General, and Administrative (SG&A) Expenses: Costs related to marketing, sales, administrative functions, and other overhead.

Profitability Metrics

• Gross Profit: Revenue minus COGS.
• Operating Profit: Gross profit minus operating expenses.
• Net Profit: Operating profit plus or minus other income and expenses.
• Profit Margin: The percentage of revenue that turns into profit.

Trend Analysis Metrics

• Year-over-Year (YoY) Growth : Compares current performance to the previous year.
• Month-over-Month (MoM) Growth: Compares current performance to the previous month.
• Forecasted vs. Actual: Compares projected performance to actual results.

Additional Metrics

• Key Performance Indicators (KPIs): Specific metrics relevant to the business (e.g., customer acquisition cost, customer lifetime value).
• Financial Ratios: Metrics used to assess financial health (e.g., debt-to-equity ratio, current ratio).

How To Create a Profit and Loss Dashboard?

Time needed:  5 hours

Create a profit and loss dashboard in minutes using a business intelligence tool . This guide will walk you through 6 steps to create a digital dashboard using Ajelix BI .

An online profit and loss dashboard provides a powerful tool for visualizing key metrics, tracking trends, and making data-driven decisions. Follow the steps in this article and create your accounting dashboard that represents a P&L overview.

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