Income Projection Example

• Difference illustrated:

  • Business makes payments of $9,000 on a vehicle yearly.

  • Of that amount, $3,000 is interest.

  • The full amount ($9,000) recorded on a cash flow statement.

  • Only the interest ($3,000) recorded on a projected income statement.

  • Why? Because principal paid on your loan ($6,000) is not a deductible expense.