What is the purpose of a projected financial statement?

The purpose of a projected financial statement is primarily to inform budgeting and financial planning. These statements provide estimations of future revenues, expenses, and cash flows based on assumptions about the business's future performance and market conditions. By creating projected financial statements, businesses can set financial goals and allocate resources effectively to achieve those goals. They help in identifying potential funding needs, planning for growth, and making informed decisions about investments and operational strategies.

In contrast, evaluating past financial performance focuses on historical data rather than future projections, while securing bank loans might be a single use of projected statements but is not their sole purpose. Reporting actual financial results is about documenting performance after the fact, which is distinct from the future-oriented nature of projections. Thus, the correct answer emphasizes the role of projected financial statements as tools for strategic planning and decision-making.