Projected financial statement

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Avnish (Querist)
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04 October 2012 Dear All,

I am working manufacturing unit, have Last years Balance sheet and half years result in hand.
I want to prepare projected financial statements for next six months.

Please guide me, how to prepare and how to use ratios for the same?

Jagga Rao Malipeddi

Jagga Rao Malipeddi (Expert)
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06 October 2012 For what purpose you require to prepare projected financial statements? The last 2/3 years statements will be guiding factor. The projections should be based on the previous performance as well as future plans. You should be in a position to convince that you can achieve the projections by focusing on your future plans. Ratios - Current Ratio should be around 1.33 and above. If you are going for a term loan they will assess the DSCR Debt Service Coverage Ratio to know whether you will be in a position to repay the instalments and interest. Ofcourse these ratios can be adjusted by changing values. Only thing is the projections should be realistic.