Pro forma statements are key financial reports based on hypothetical situations. They show the business owner’s future outcomes of financial results based on his or her business strategies and performance operations. These financial statements can be used to help with the preparation of a business plan, financial forecast, as well as obtaining funding from a potential investor or lender.
There are three primary pro forma statements:
- Pro forma income statement
- Pro forma balance sheet
- Pro forma cash flow statement
It is worth noting that Pro forma statements look like regular financial statements, except they are based on key assumptions, projections, and estimates.
Additionally, Pro forma statements can be used to present different results based on various business strategies. Perhaps you would like to know how an infusion of cash in the amount of $150,000 would affect the overall business financials if it was a debt versus equity funding.
If you need assistance with preparing Pro forma statements or a financial forecast, we would like to help. Contact us today and let’s get started quantifying your new business ideas.