Creating a budget for next year

After you've created your management income statement, management balance…statement, and cash flow statement, you can update those documents for next year.…Part of your analysis that doesn't appear in the financial statements, but…should appear in your discussion and presentation is your assumption regarding…sales growth and also growth of expenses.…For example, do you have a goal of 20% sales growth for next year, to hire…another 15 employees, or maybe finance renovating an office building through…long-term borrowing?…Each of those assumptions must find your way into your budget, but that's a…business analysis problem, not an Excel problem.…

When you do settle on your numbers for next year, enter them into a copy of your…income balance and cash flow statements.…Be sure to add another column that calculates the difference between the two…values, indicating an increase or decrease in the revenue or expense.…For example I've taken the balance statement that I created earlier.…And I have added a Projected column for fiscal year 2011 and a % Change column.…