Instead, your net income ultimately flows towards your ownership stake reported on the balance sheet under the equity section.
The pro forma balance sheet incorporates not only your net income but other financial aspects worthy of tracking.
Often, a balance sheet that covers your operations reports two years of activity as of a specific date.
One noticeable difference with your pro forma balance sheet is it may cover additional periods.
They do it by giving a picture that the vision is sweeter than the reality. The same person that allocates capital will no longer concern in your further initiatives.
Pro Forma Business Plan Thai Restaurant Business Plan
On the other hand, pro forma statement can forecast the income on each plan and can predict capitalization.
Although knowing your budgeted net income is important, it doesn’t translate to your entire financial operation.
Consider that your annual budget does not factor in your bank balance, receivables, or payables.
Similar to how a budget is useful for planning for the future, you use a pro forma balance sheet to plan and strategize about the future.
Your budget is loosely related to a pro forma balance sheet.