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Projected Income Statement

One of the hot topics of the current times is “Projected Income Statement” as this is the need of numerous non-accounting professional people. People want to make a projected income statement for their number of different needs. Some want to project their business performance in the future while others want estimated potential of revenues and profitability of their new business venture. 

Statement Heading

Mainly the projected income statement is one of the essential features of any financial plan. You also need this statement when you are in the state of making business plan for your business future.

Company name and Period:

The basic format of income statement requires the company name in the top heading followed by the period of income statement heading.


Any income statement is based on a specific period but it cannot be more than a year. For projections in income statements mainly a 5 year income statement is made which is combination of 5 yearly income statements. Number of Financial plans requires monthly breakups for 1-3 years of projected income statement.


There are two formats for the income statement the account format and the report format. The former is the best to make the projected incomes statement to show you projections in detail and step by step method.


The primary figures in the projected income statement are projected revenues. These are calculated by multiplying the number of items to be sold in a category by the average sale price of your product in the each category. The sum of revenues of all the categories is the gross projected revenue. Now you have to project if any discount to be given on your products in term of units or percentage of price. The percentage of expected goods returned should also be estimated. Both the Monetary figures of discounts and expected good returned should be deducted from the Gross revenues. The resulting figure is the Net Revenues of the business.

Cost of Goods Sold

Cost of Goods Sold (CGS) is calculated by estimated percentage of cost on each type of revenue. The Resulting figures are summed up for the Total CGS. The (CGS) of each item is composed of three major factors; the labor wages, the material consumed and Overhead Expenses incurred on the goods sold.

Gross Profit:

This shows your company profit before the fixed expenses or the operating expenses. This results of subtraction of CGS from the revenues.

Operating Expenses:

Following are the major types of operating expenses with are esetail to include in any projected income statement:

Salaries Expense:

One of the main points of the salaries in projected incomes statement is that how many and what type of employees do you want. Now, you will have to form an organizational hierarchy for this all. Now you have to decide that what will be the salary of each employed to be hired. The sum of all the salaries is the projected salary expense.

Utility Expense:

This expense includes the estimated expenses on company’s phone and net, Electricity and Gases consumed for purposes other than production.

Rent Expense:

This expense is the sum of all the rent expenses of locations under the organizations possession.

General & Administrative Expenses:

All the expenses used on the general and administrative purposes come under this category sum of all of these estimated expenses.

Sales & Marketing Expenses:

The amount spent on the physical marketing, online marketing, electronic and social marketing and salaries of sales staff comes under this expense head.

Depreciation Expenses:

The percentage of life used for the fixed assets is called the depreciation expense this is deducted from the gross profit in income statement, added back in cash flow statement as this is a non-cash expense and deducted from the fixed assets in balance sheet.

Interest Expense:

This is calculated by the amortization schedule with the help of amount of loan, interest rate and duration of loan. If there are multiple loans expected to be received then the separate amortization schedule is needed to be made to separate the interest and principal amount of each loan. The sum of all the interest expense is taken under the projected interest expense.

Taxes other than income tax:

You got to include the taxes like property tax, customs, excise duties and other expected taxes imposed by the government.

Total Operating Expenses and Operating Profit:

There also can be further many other miscellaneous expenses comes under this head the miscellaneous head. The some of all expenses list given above are considered to be the total operating expenses. This total figure is deducted from the gross profit and the resulting figure is the operating income.

Income Tax and Net Income:

The percentage of tax imposed according to the local government law on the income of the company is called income tax. This is deducted from the operating income of the company to get the projected net income.

The next year income statements are made considering the expected growth in the revenues and expenses. If you still feel any difficulty in making the projected income statement for your business then please don’t hesitate to contact Research Region team of financial experts. The above given procedure is a sort example of our way of work to make a projected income statement and ultimately a financial plan for Research Region Customers. Click here to contact us now.



Example of projected income Statments



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