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Projected Income Statement

What is a Projected Income Statement?

A projected income statement shows an estimate of the profits and losses in a future period of time – the next quarter or the next fiscal year, for instance. It uses the same format as a regular income statement, but projects the future rather than recording numbers from the past.

So, what does an income statement look like?

Think of it as a set of stairs. You start at the top with the total amount of sales revenue made during the accounting period. Then you go down, one step at a time. At each step, you make a deduction for certain costs or other operating expenses associated with earning revenue, which brings you to a specific subtotal. At the bottom of the stairs, after deducting all expenses, you learn how much you actually earned or lost during the accounting period (can be either a calendar or fiscal year, but also a week, month, or quarter, etc). People often call this “the bottom line.”