What is Pro Forma Income Statement?
A pro forma statement is a statement that presents the income of the entity in the estimated period and the expenditures to be made in a categorical manner and summarizes the result of such period activities as profit or loss. The income and expenditure of the future period of the enterprise can be estimated by this table. The most important source for information can be used in financial analysis is the “Financial Statements”. These tables are static because they generally cover the years prior to the time of the analysis. One of the most important methods to determine an entity’s need for financing is the estimated financial statement. These are also known as Pro forma Income Statement. These tables which are used in financial analysis consist of pro forma income table, pro forma balance sheet and cash budget table. We will talk about pro forma income table in this topic.
How to Create a Pro Forma Income Table?
A pro forma income statement and pro forma balances are used when long-terms financing needs which are specified in the enterprises. Cash budgets are used for the short-term financial requirements. It shows the summaries of the operations of the operator at a certain period. This period is usually stated as one year. Income and expense items included in the income table may vary according to the type of the business line in which the entity operates. How can you create a Pro Forma Income Table? Here are some important details below:
- First, review the current situations of your income table then start to predict the financial future
- Write the name of the table at the heading part; state why you prepare this table?
- Type a date for start and go on for the other time periods; Start title-pro forma year1 title-proformayear2 title-proformayear3 title etc.
- Create an “Assets title”. Then this part can divided into the other subtitles. (Current Assets, Long-Term Assets, Total Assets…Give the details for each one.)
- Create a “Liabilities and Equity” title. ( Current Liabilities, equity, total liabilities & equity)
- When you complete the table with the details; you can write the pro forma investments and expenditures at the specific time period.
You can create this table in an easier and practical way; using a ready template for the pro forma income table is very useful method to prepare this table in an appropriate and effective way.
Where can you find the Templates?
You can find the pro forma income table templates at many websites. This template service is generally free of charge. Write some related key words like “Free pro forma income table download” on the search engineers and see the results. Choose one template, download and edit it easily. Templates are the ready pre-designed formats so you don’t need to struggle too much. You can spend your time while you are getting a professional/useful pro forma income table.
The Best Templates
If you have a difficulty to find a website; you can review the websites which are listed below:
Let’s start to use a pro forma income statement template and prepare your table very easily!