How Do You Prepare A Pro Forma Income Statement?
An income statement summarizes a business’s profitability. As part of a business plan, a pro forma income statement predicts the coming year’s expected sales and operating expenses. Revenues (sales) minus operating expenses equals profit or loss. Start-up businesses use pro forma income statements in the business plans they present to lenders, investors or grantors. Gather the information you have collected on the market share you expect to gain (forecasted sales) as well as all of the costs of operating your business. Include in your operating costs expenses for the one-year time frame such as rent, salaries, production costs and utilities. Write your business name as the header of your statement. Under it write, “Income Statement,” and under that write, “For the year ending (date).” Center the three lines of text. On the left-hand side write “Revenue” under your header as a subject line. Under the word “Revenue” write “Gross Sales.” Under that write “Less sales returns and allowances
