Forecasts and projections are the two types of prospective financial statements.
A forecast is management's estimate of future results and is based on assumptions reflecting conditions it expects to exist and the course of actions it expects to take. It can take the form of a specific amount or can be a range. For example when a sales forecast is made by management consideration must not only be made about sales for various products for each geographic location and type of customers but costs directly related to sales must also be forecast. Sales will be determined to some extent by the amount spent for the selling effort and distribution costs will be a function of the units sold. Moreover the sales budget is dependent about what will be with the advertising and sales expense budgets because sales will be a function of the selling effort. They are all intertwined, so-to-speak.
A projection presents an entities expected financial position given one or more hypothetical assumptions. It is sometimes used to present one or more hypothetical courses of actions for evaluation. It often answers the a "what if” question. A projection like a forecast may contain a range of results based on the hypothetical course of actions. Projections are quite useful where management wants to test how a hypothetical course of action such as changing the product mix of sales or changing price levels might impact results of operations or financial condition.
A budget can be a forecast or a projection depending upon whether it is based on whether management's assumptions and actions are expected or hypothetical. The budgeting process is often broken down into component parts such as a budget capital expenditures, or for sales, a budget for costs - purchases, hiring employees, scheduling production, so that arranging for the supply of sufficient cash can be planned and available at the appropriate time. Using budgets allow management to predict the results of a specific course of action and compare the results to what actually happens. This can be very extremely useful, because management may be able to change its strategy before the event has occurred, rather than after it.
"A very Uncommon CPA firm. Brent Ross and his team are extremely helpful and not only care about counting beans, they care about teaching their clients how to plant and grow the beans! They have unique ways of finding... read more
"I have known Brent and his family for over thirty years and have always had the highest respect for him as a friend, as a Christian, and as our accounting and business consulting partner..." read more
"Brent and his staff have provided excellent services in a timely manner for many years. The Firm is one of knowledge, experience, and integrity." read more
"I have retained the services of Brent and his team for many years. I have found them to be honest, reliable, on top of current law change, and communicate well with me. They have always..." read more
"John and Brent were extremely helpful throughout the start-up and growth phases of the business. They provided timely, clear and useful advice regarding appropriate accounting and tax issues. They took the initiative to..." read more
"Brent Ross and his associates have one of the top CPA firms in Jacksonville. They take the time to understand your business so you can maximize your business. Moreover they bring..." read more
"We had a complicated return of 2 states and 3 jobs and he made the process a breeze. Brent and his staff worked together to help make sure we were ready by our target date..." read more
"Brent is a professional at heart that truly tries to understand the issues you face. He then tries to understand how he can help you, not only from an accounting/tax benefit, but how to..." read more
"Brent has provided outstanding accounting services for me personally and for some small corporations. His ability to track the details from year to year is amazing..." read more
"Brent and his firm have always been accessible, dependable, timely and creative when needed. His insight regarding a company's operations goes beyond crunching numbers..." read more
"Brent Ross is a powerful business coach. His coaching skill and financial expertise are the perfect combination for any business owner..." read more
"Over many years, Brent's firm has represented several of my clients (Disclosure-I am Brent's brother and a practicing attorney), and those clients and myself have found the personnel in Brent's firm to be very knowledgeable..." read more
"I have know Brent for a while now. He does more than just your taxes. He is a true advisor that help business owners unlock more profit in their operations..." read more
"Brent and his team don’t just "crunch numbers”. He provides a variety of services to help their clients improve their businesses. Brent’s cost segregation studies can generate an immediate increase..." read more
"It is without a single reservation that I recommend Brent Ross. I have worked with Brent and the Harrison Assessments organization for a while now ..." read more
Real estate investors have reason to celebrate in the upcoming tax season: The Tax Cuts and Jobs Act significantly expanded the first-year tax breaks for bonus depreciation and Section 179 deductions. But Congress may need to fix one intended change before it can benefit investors. And there are some pitfalls to consider before taking advantage of first-year depreciation breaks for real estate.
Historically, companies that wanted their employees to be protected with health coverage, but didn't want the hassle of having a company health plan, could simply give employees an amount of money sufficient to reimburse them for the cost of buying that coverage or some portion of it. As long as the individuals provided evidence that they used those funds for that purpose, the dollars were excludable from taxable income for the employees.