Financial projections
This query is : Resolved
17 November 2014
I am preparing Financial projections for one of our client which is proposing manufacturing of "X" Product.
1. I have query that while compiling Financial Projections, can we show the negative profitability in first 3 years,but Cash Profit (PAT + Depreciation) is positive.
2. Can We show negative working Capital?
1. I have query that while compiling Financial Projections, can we show the negative profitability in first 3 years,but Cash Profit (PAT + Depreciation) is positive.
2. Can We show negative working Capital?
Amol S Joglekar
(Expert)
17 November 2014
SHOWING?????? What do you mean by that? If it is estimated that first 3 years will be LOSS making years, then there is NO harm in disclosing the same to the BANKERS. Never PLAY with the figures....Be true and fair.
CA R SEETHARAMAN
(Expert)
17 November 2014
For financial(cash flow) projections add back depreciation.
For working capital show short term borrowings to make it positive.
For working capital show short term borrowings to make it positive.
17 November 2014
The meaning of can we show is that, if the profitability is negative whether it effects our borrowing power.that is what i meant.
Amol S Joglekar
(Expert)
17 November 2014
It need not affect the borrowing power as such so long as it is well within the debt equity ratio.
Amol S Joglekar
(Expert)
17 November 2014
No. Negative working capital suggests that your company is CASH RICH.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Query on effect of registration of property
- GST on reimbursement of expenses
- Due date for filing return for the partner in partnership subjected to Tax Audit
- Visiting card purchase
- Goodwill transfer of deceased father’s firm – ICAI applying a 27.04.2026 cut-off to the 3 year limit
- Number of years as per AS amortisation of Goodwill
- Wrong CMPo8 file
- Whether output tax is taken credit by purchaser
- Additional trade name
- Equity Share Sale and Purchase
- Classification of income of P Ltd company as business or profession
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
- How to get money back from delisted company
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
