A brief guide to profit and loss forecasting
Finance & Funding
In a nutshell
- A profit and loss (P&L) forecast gives you a snapshot of your business' expected in year performance, of your financial activities
- A P&L forecast takes your actual reported finances and forecasts them forward, usually until the end of the current financial year, but can be used for planning further ahead
- The P&L does not look at the long-term health of your business. You would have to forecast your balance sheet for this
A profit and loss forecast is essential for measuring the financial activities of your business.
In this guide, we’ll be looking at what profit and loss forecasting is and why it is important for taking your business further and achieving more.
What is profit and loss forecasting?
A profit and loss forecast in a financial report. It looks at sales you’ve made, and expect in future periods, against the money you’ve spent and forecast spending. Therefore, providing you with a snapshot of your business where you can measure financial activities over a period of time.
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