Cash projection is one of the very important steps in financial forecasting. Why do we need cash projections?
1) Construction project feasibility assessment.
2) To analyze the financial feasibility of many programs before making commitments.
3) Dealing with funds when they are needed and when they are available.
4) Identifying the problems by comparing the different forecasting levels of cash with actual results.
5) To facilitate the organization alignments.
Construction schedule, sales schedule,land development cost plans and details, overhead expense plans details are the sources of information for cash projections.
8 Steps to create a financial forecast for your construction project.
Step 1) Establishing your core objectives.
Step 2) Determining your cash flows from sales.
Step 3) Cost of production scheduling.
Step 4) Overhead costs budgeting.
Step 5) Other sources fund details.
Step 6) Determining the details of expenses that you need to pay but are not part of your income statement.
Step 7) Determining equity and amount you will pay to your investors.
Step 8) Do analysis on each project.
How to create financial forecasts using Microsoft Excel step by step?
1) Creating simple spreadsheet in Microsoft Excel.
2) Using excel functions and formulas.
3) Cash flow format details.
4) Your construction business sales forecast.
5) Production cost scheduling.
6) Budgeting overhead cost.
7) Details of deposits, loans and accounts receivable.
8) Expenditures not in your income statements.
9) Equity needs details.
10) Creating financial statements using excel.
11) Structuring a construction deal.
12) Sensitivity analysis.
13) The complete construction projection.
14) Working with debt.
15) Advanced concepts on construction business.
16) Final thoughts on forecasts.
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