Title: Pro Forma Income Statements Word Count: 416 Summary: Pro forma income statements look at revenue and expense projections for future periods. The numbers won't be perfect but process of analyzing your sources of revenue and expenses and using that for business planning is the main value of pro forma income statements. Keywords: Pro Forma Income Statement Article Body: Pro forma income statements look at revenue and expense projections for future periods. Pro forma income statements are generated by looking at financial performance the year before, comparing it to the current year figures and using the changes to make projections into the future. Pro forma income statements can be made without past and current data as well. Figures are estimated for the first year and then assumptions are made about how those numbers will change in future periods. The most important thing with pro forma income statements is that you need to track changes from period to period and then apply those changes to the future. Estimating Pro Forma Income Statement Numbers Revenue How much service revenue do you anticipate generating? Are you going to be reselling products and if so, what do you anticipate your sales to be next year? Will there be other potential revenue coming in i.e. acting as an agent and getting referral fees from ISPs or Web hosts. Cost of Goods Sold What does it cost you to purchase the items you are reselling? Budgeted Expenses Exhibits Sales Seminars Direct-mail expenses Postage Printing costs List rental Copy editor or graphic artist Sales Call expenses Gas Tolls Parking Telesales Phone expenses Display advertising Commissions IT expenses Training and certification Research and development Subscriptions Extra PCs Administrative expenses Payroll Subcontractors Telecommunications expenses - cell phone, business line Insurance – Business, General Liability, Casual Travel and entertainment Office supplies Health insurance Car payments Bank fees Credit cards fees Professional fees – accountant, lawyer Total up your revenue - Subtract your expenses - You have a pro forma income statement. Analyze your numbers against previous years’ data or assumptions about the future and create statements for 3 – 5 years into the future. Breaking your pro forma income statements down into quarters is a good idea. Obviously, the further out you go out the more subject it will be to change, but it's important to be thinking about the future and putting a plan down on paper. The Bottom Line on Pro Forma Income Statements Pro forma income statements are an excellent planning tool. They are based on historical performance and best guess estimates of the future. The numbers on a pro forma income statement won't be perfect but the exercise of analyzing all your sources of revenue and expenses is one that will assist your business planning process immensely. Copyright MMI-MMVI, Computer Consultants Secrets. All Worldwide Rights Reserved. {Attention Publishers: Live hyperlink in author resource box required for copyright compliance}





------------------------------
From the library of Opportunities Unlimited
Private Label Rights to this Article are included.
This Article is Free and may be reproduced without
Permission from the Author, as long as the content
and body of the Article are not altered, and the Author are given credit.
Credits to the Author are given, where described.
Opportunities Unlimited is not the author of this Article.
For more info visit: https://opportunities-unlimited.com


Return to Library







Affiliate Program - Earn 50% Commission
No website needed! FREE Affiliate Bootcamp Training! Signup Today!
https://opportunities-unlimited.com/affiliate-program.php