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Part of Financial projections: three linked statements, the assumptions page as the deliverable
7 notes on financial projections format worth reading
Financial projections format: what goes on the page and what stays in the workbook, how to label periods and rounding, and the print check that finds the rest.
A model can be right and still be unreadable, and an unreadable model gets discounted rather than questioned. This page is about presentation only: which figures appear in the document, how the grid is laid out, and the conventions that stop a reader misreading a number you got correct.
None of it improves the arithmetic. All of it changes whether the arithmetic survives contact with somebody who has twenty minutes.
What to take away
- The document carries summaries and the assumptions page. The grid belongs in an appendix or a separate file.
- Label every column with its period and every figure with its unit. A number without a period is unreadable.
- Round once, in the model, and quote the rounded value everywhere.
- Print it. Half the faults in this section only appear on paper.
What goes where
| Where | What belongs there |
|---|---|
| The narrative section | Six to ten figures, each in a sentence that says what it means |
| The assumptions page | Every input, its origin, and its source date |
| Summary statements | One page each: income, cash, balance, in the order each statement is normally read |
| The appendix | The monthly grid, the sensitivity table, the sources and uses detail |
| A separate file | The working model, with formulas visible |
The mistake is putting the grid in the middle of the prose. A reader who meets a wall of monthly columns before they have been told what the business does stops reading the argument and starts scanning for a bad number.
What Goes Where
Document part
- Narrative
- Six to ten figures, each explained
- Assumptions
- Every input, origin, source date
- Summary statements
- One page each: income, cash, balance
- Appendix
- Monthly grid, sensitivity, sources and uses
- Separate file
- Working model, formulas visible
What belongs there
- Narrative
- Assumptions
- Summary statements
- Appendix
- Separate file
Column and row conventions
Put periods across the top and lines down the side, always in that direction. Label each column with the month and the year, not "M1" and "M2", because a reader who returns to the document in March needs to know which March you meant.
Column and Row Conventions
- Periods across the top, lines down the side
- Label columns with month and year, not M1
- State the unit once at the top
- Say whether figures include sales tax
- Keep conventional line orderrevenue to result
- Show subtotals sparingly, visually different
State the unit once at the top of the block and never mix units inside it. Say whether figures include or exclude sales tax, and say it in the header rather than in a footnote.
Keep the line order conventional, which is the order the projections guide uses: revenue, direct costs, gross margin, then operating costs, then result. Readers scan for the gross margin line by position. Moving it to be interesting costs you comprehension for no gain.
Show subtotals sparingly and make them visually different from the lines they total. A page where everything is bold is a page with no emphasis at all.
Rounding, negatives and blanks
Round once, in the model, then quote the rounded figure everywhere it appears. Rounding a second time in the prose is how the summary and the appendix come to disagree by a small amount, and a reader who finds that difference does not assume it was rounding.
Rounding, Negatives and Blanks
- Round once in the model, quote everywhere
- Show negatives the same way throughout
- One name for the unit of sale
- Parentheses or minus signs, not both
- Distinguish a zero from a blank
Show negatives the same way throughout, and pick the form your reader uses. The same applies to the unit of sale carried over from the product and service section: one name for it, everywhere in the document. Parentheses and minus signs are both fine; both in one document is not.
Distinguish a zero from a blank. Zero means you expect nothing that month. Blank means you have not filled it in, and a blank that reads as zero is a hole in the forecast a reviewer will find.
The lowest cash balance gets its own line
Somewhere on the cash page, state the lowest balance of the year and the month it occurs. It is the single figure a lender is looking for and it is usually buried in a row of twelve numbers.
Lowest Cash Balance
Lowest balance of the year
State the month it occurs
The single figure a lender looks for
Usually buried in a row of twelve
The same applies to break-even. Give it in units you recognize, such as jobs a month or covers a week, next to the capacity figure it has to sit under. That comparison is worth more than a page of commentary, and it follows straight from the operations plan.
Labels that stop a misreading
- Say which scenario a page shows, in the header, on every page. A stress case detached from its label becomes your forecast in someone else's file.
- Date the modeland put the version in the file name as well as on the page.
- Mark any figure that is not yours, such as a quoted rate or a supplier price, with the date it was quoted.
- Say what is annualizedand what is actual, especially in a first partial year, and keep the head count consistent with the team section.
- Name the source beside any external figure, such as the published wage series used to price a role you have not yet hired.
When the reader supplies a form
Many applications collect the financial section as fields or as their own workbook. Get that format before you build anything, because rebuilding a finished model into somebody else's row structure takes a day and introduces errors on the way.
Where their categories do not match yours, map your rows to theirs in a separate tab and keep both. Do not restructure your own model to match a form; you will need your version again for the next reader, and the mapping tab is the thing to reuse.
If their sheet computes totals for you, check those totals by hand once. A locked cell computing something you did not expect is still your submission.
Print it before you send it
Print the financial pages at the size the reader will see. Then check that every column fits on the page, that no row wraps into an unreadable stack, that the type is large enough to read without leaning in, and that the page numbers and headers survived the export.
Wide grids that will not fit are telling you to move detail to the appendix rather than to shrink the type. A financial page set in small type reads as something you would rather were not examined.
Read the printed pages in the order a reader will meet them, which is the order the plan guide describes, and check that the figures in the prose match the ones in the tables. That last check catches the error that costs most.
Common questions
Should the projections be in the document or attached separately?
Summaries in the document, the full model attached. Ask your reader which they want as a file, because some want a spreadsheet they can open and change.
Do I need charts?
One, at most, and only if it carries something the table does not, such as the shape of the cash line across a seasonal year. Charts without labeled axes and a stated period read as decoration.
How much detail in year three?
Annual, with the assumptions stated. Monthly detail that far out implies knowledge nobody has, and the extra columns invite questions that add nothing.
Can I send a PDF only?
You can, and many readers prefer it for the narrative. Expect to be asked for the workbook as well if there is a credit decision behind the reading, and have a version ready that does not contain notes to yourself.
