Projected Financial Condition Analysis Template

Calculation of projected financial condition requires the consideration of different variables. You have to calculate some obvious, necessary, and variable expenses such as food, shelter, and healthcare. While calculating financial conditions, you have to consider the inflation rate because it is an important factor that can increase the cost of living. You can take the example of the dollar as it is more expensive today as compared to the past. You have to consider both predictable and variable expenses with the adjustment of inflation to have a good estimation of financial condition. These types of plans can be utilized for a longer period with some alterations according to your requirements.

Plan for Projected Financial Condition Calculation

In the first step, you have to calculate the current needs of inventory and costs. Current financial needs will provide you with a good framework to get an estimate of future value. Prepare a complete list of current expenses such as groceries, utilities, housing, health care, labor costs, overhead expenses, inventory, etc. The amount written for each category can be increased or decreased according to future circumstances but still, it will give you a perfect starting point.

Here is a preview of this Projected Financial Condition Analysis Template created using MS Excel,

You have to write future needs and income sources based on future expenses like health care requirements that may surely increase in the future. You should have the ability to generate new sources of income in the future including social security and private pension plans.

The inflation rate has a dramatic effect on the rise or fall of your future expenses so you have to pick an inflation rate. You can select an estimated inflation rate from the historical inflation rates provided by the Bureau of Labor.

Prepare a record of current financial assets because the amount of cash and assets in your possession will help you determine your financial ability to cover your projected financial needs.

You have to approximate your future income to check the growth rate of your income in the future. You can take the data from a few previous years to have an estimate on its basis. It will help you to increase your income or save by cutting some costs for future retirement payments.

Inflation is one of the biggest reasons that can increase or decrease the value of your money. You have to determine some long-term goals to save money for your future financial needs. Select a fixed time frame such as 10 years or 20 years to paramount the calculations for your future needs.

You can calculate your projected financial conditions by multiplying your future needs with an annual interest rate. Take the number of your future needs to multiply it by the estimated annual inflation rate. Add this amount to your future needs projection to get an estimated future needs in dollars.

For instance, if your approximate future needs are $50,000 per annum then you have to multiply it by an estate inflation rate of 3.5 percent which will be equal to $51,750 for every year and $53,561.25. Continue this process for the calculations for more years.

Subtract the inflation-adjusted predictable operating cost from probable income and savings. If the expenses surpass assets then you have an added monetary need. It is obligatory to find dissimilar ways to augment your pay packet and savings rate to lessen future expenses to cover projected needs.

Here is the download link for this Projected Financial Condition Analysis Template,