How to Write a Projected Income Statement for a New Business
Since a business is organized and run to earn a profit, an income statement is often the first financial statement a new business prepares. A projected income statement indicates how the new business expects to perform financially. A small business may use the single-step format when preparing a projected income statement: revenues less expenses equal net income.
Create a report header for the income statement directly below the top margin. Include the business name, the projected income statement period and the preparation date as separate line items of the header.
Space several lines below the header and create two columns. Write the projected period as a column header in the right column. This column will include financial projections, while the left column will list brief account descriptions related to the financial projections.
Label the first line item in the left column as “gross revenues.” Tab to the adjacent column and on the same line, enter the projected gross revenue figure for the period.
Create line items underneath gross revenues that will include the projected expenses for the fiscal period. Label each line item with a two- to three-word description, including wages, rent, utilities and interest expense. Enter the projected expense amount for each line item, and total the expenses.
Space a line or two below total expenses, and create a line item named “net income.” Subtract the company’s total expenses calculated in step 4 from its total revenues displayed in step 3. Enter the result -- projected net income -- on this line.
- The projected income statement may be prepared using a spreadsheet or as a table within a word processor.
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