Financial projections

This query is : Resolved

Vijay (Querist)
Follow

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?

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

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

CA R SEETHARAMAN (Expert)
Follow

17 November 2014 For financial(cash flow) projections add back depreciation.
For working capital show short term borrowings to make it positive.

Vijay

Vijay (Querist)
Follow

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

Amol S Joglekar (Expert)
Follow

17 November 2014 It need not affect the borrowing power as such so long as it is well within the debt equity ratio.

Vijay

Vijay (Querist)
Follow

17 November 2014 Does Negetive working capital effects the borrowing bower?

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

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

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

ASHOK KUMAR TEKURU

Sidhartha sankar pillai

Pritanu Chakraborty

bhagat ram goyal

GIRISH K SATTI

Subscribe Now

Financial projections

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA