Creating a Pro Forma Income Statement: Facts & Facets
A pro forma statement is a look at those 'what-if' situations, where pro forma means projected or future. It's basically a tool that stakeholders, business owners, investors, decision-makers, and creditors, use for examining those hypothetical conditions. They look forward & backward to reveal financial information, which standard financial statements fail at offering. Best Time to Use Pro Forma Statements These financial statements are uniquely insightful; hence using them in a number of situations makes sense. Here's an outline of the best time to use these statements. Financial Modeling & Business Planning It's convenient for business leaders to look at the side-by-side comparisons concerning different assumptions to guide strategies. For example, management can decide between two individual proposals or plans. They might create these statements for scenarios to witness what might serve definite goals & visions the best. As a matter of fact,...