Creating Notes for Financial Statements and Forecast

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Creating the Notes to Your Forecasted Financial Statements:

After completing your Financial Budgets (step 1) and all your Forecasted Statements & Analysis (steps 2 through step 7) for each forecasted business year, your final step involves creating Notes to the Forecasted Financial Statements.

Recall from previous discussions, The Notes to Financial Statements, summarize or explain the "activities" and "assumptions" made by the entrepreneur when creating the forecasted financial statements. The purpose of developing these Notes is to reduce any confusion a reader may have when viewing your forecasted financial statement section.  Further, the Notes will equip the readers (bankers, investors, and other readers) with the necessary information needed to understand and comprehend the forecasted financial statements.

Important: never, ever, ever, create the "Notes to the Forecasted Financial Statements" until you have fully completed your forecasted financial statements and analysis.

There is no set structure nor specific guideline that dictates which topic(s) should be included in the notes to the financial statements. Instead, it is left up to the entrepreneur to decide which items warrant a "note" and which items are self explanatory. The following list provides some suggestions you may use when creating your notes to the forecasted financial statements.

POSSIBLE NOTES TO THE FORECASTED FINANCIAL STATEMENTS:

  • Sales Forecast note to the financial statements
  • Gross Margin note to the financial statements
  • Management and Staff note to the financial statements
  • Office or Store Supplies note to the financial statements
  • Bad Debt Expense note to the financial statements
  • Marketing Expenses Breakdown note to the financial statements
  • Income Tax Rate notes to the financial statements
  • Income Tax Payable note to the financial statements
  • Net Income note to the financial statements
  • Accounts Receivable note to the financial statements
  • Personal Assets Invested by the Owner note to financial statements
  • Fixed Asset Purchases note to the financial statements
  • Deprecation Rates on Fixed Assets note to the financial statements
  • Inventory note to the financial statements
  • Accounts Payable note to the financial statements
  • Short-term Loans note to the financial statements
  • Long-term Debt (mortgages) note to the financial statements
  • Sales Tax note to the financial statements
  • Owner(s) Capital Account note to the financial statements
  • Retained Earnings note to the financial statements

 

To view Murray Wilson's (Scholarship Information Services) "Notes to the Forecasted Financial Statements", please click HERE.

 

ADDITIONAL EXAMPLES OF "NOTES to the FORECASTED STATEMENTS":

J&B Incorporated
The Internet Company
The Maple Syrup Company

 

Categories: Forecasting