Every business, whether big or small, has to make use of a pro-forma statement which is a crucial piece of financial document that reflects the business’ financial state. It displays the financial figures of monies flowing in and out of the business.
A pro-forma statement functions like an income statement that projects the future figures instead of the past year figures for the company. It works like a budget tool for planning the future operations of the company. These kinds of projection allow the company to adjust quickly to the changes impacting the business to lessen the adverse effect.
The pro-forma statement records all the financial information about the company to determine the net income of the company after taking into account the accrued expenses. A pro-forma statement that shows an accurate bottom line figure allows the company to make the right business decisions such as marketing strategies and promotions.
The basic information found in a pro-forma statement includes revenue, cost of sales, operating expenses, net income or loss. Each of these categories registers the details incurred for that period of accountability. Every cent in and out of the company is recorded to showcase the company’s financial performance.
The pro-forma statement template may contain:
* Company Name
* Company Address
* Income Statement Date
* Period ending date for various years’ comparisons / projections
* Cost of Sales
* Operating Expenses
* Net Income / Loss
Consider the attached sample template for your convenience.