Many profitable businesses have ended in insolvency. Profits do not equal cash and projections are an essential management tool in making investment decisions. If external funding is to be raised it is increasingly common for financial projections to be presented.
Where a high level of debt is being serviced it is sensible to look to the future and consider if the projected profits will generate enough cash to meet the debt repayments.
Managers and owners often look for a goal and financial projections for some are a part of the formula required to work towards the required profitability.
Our approach to compiling financial forecasts is to learn about your business to understand what drives the income and costs and the interaction of these. Contact us for more help.