![]() This type of pro forma projection takes into account all of your financials for the fiscal year up until the present time, then adds projected outcomes for the remainder of the year. While they all fall into the same categories-income statement, balance sheet, and cash flow statement-they differ based on the purpose of the financial forecast. There are four main types of pro forma statements. So, when you create next year’s budget, you can include that extra $7,000-maybe spending $4,000 over the course of the year to pay down the principal on a loan, while adding $3,000 to savings. ![]() According to your pro forma annual income statement, your financial projections show it will be $44,000 next year. Your budget may be based on the financial information of your pro forma statements-after all, it makes sense to make plans based on your predictions.įor example: Your income this year is $37,000. Think of it this way: A pro forma statement is a prediction, and a budget is a plan. But budgets and pro forma statements are two distinct financial tools. And both help you plan how you’ll use your money. ![]() After all, you create both in anticipation of the future. It may be tempting to think of a pro forma statement as the same as a business budget. Big corporations who have in-house accountants use pro forma statements for financial modeling and forecasting different scenarios.
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