Every business, whether big or small, has to make use of a pro-forma income 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 income statement is like a historical income statement; it 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.
Pro-forma income statements help to determine if expenses are expected to be higher in one quarter than the future quarters. They help to determine if sales will be higher than expected on any month or the year. All these kinds of information help the company decision makers to make the right business decisions.
The basic information found in a pro-forma income statement has revenue, cost of sales, operating expenses, net income or loss. Each of these categories registers the details covered. Every cent in and out of the company is recorded for good accountability.
The pro-forma income 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.