How Do You Create A Pro Forma Income Statement?
A pro forma income statement is a financial document predicting a company’s expected sales and expenses for the coming year. It is similar to a normal income statement, except the pro forma statement is based on predictions, unlike a normal income statement, which uses real numbers. Creating a pro forma income statement uses predictions to calculate what the expected net income of the business will be. An income statement uses the equation of revenues minus expenses equals net income. Retrieve the company’s income statement from the current year. The pro forma income statement is laid out in the same way as the regular income statement format. Begin by filling out the pro forma statement with the company’s name at the top. The second line states the financial statement it is and below that, states the time period of the report. Determine the changes in revenues and expenses that are projected. Revenues are calculated first by deciding if an increase or decrease is expected for the comi
