What is Projected Balance Sheet – The balance sheet provides a useful tool for reckoning the financial standing of a unit. Since all the assets and liabilities are listed in the balance sheet it is possible to ascertain to a large extent the financial position of the unit from the balance sheet entries. The balance sheet ignores intangible assets which can not be quantified in monetary terms.
The projectecd balance sheet enables the project formulation team and the project implementing body to find out the basic movements in the financial structure of the project over the years. It projects the effects of operational, financial and investment strategy in monetary terms and enables the decision makers to arrive at a reasonable conclusion regarding the desirability of undertaking the project from time to time.
Projected Balance Sheet Format
Balance sheet is not only the record of assets and liabilities of the unit. It contains detailed information about the sources of funds and deployment of funds. The projected balance sheet is prepared on the basis of projected inflows and outflows of resources. The validity of balance sheet is thus dependent to a large extent, on the validity and accuracy of operating revenue estimates, operating cost estimates and consequently the projected profit & loss account.