| The income statement is a record of revenues versus expenses for a stated period. The income statement shows the accounting profits or losses of a business
by accounting for receipts or revenues minus the expenses. A pro forma income statement is much like a historical income statement, except rather than tracking the past it projects the future. Pro forma income statements are a useful tool in planning for future business goals. The income statement is used to plan profitability for the business. It provides a benchmark for operating a business throughout the year. The information provided is invaluable in making right choices for your business and adjustments to your business. |
1. The pro forma income statement should
be done:
year 1 -
monthly
year 2/3 - quarterly
2. Explain in narrative or footnotes to the document
the rationales used
to reach the amounts on the balance sheet -
BE SPECIFIC!
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