How to Prepare Pro Forma Financial Statements: Guide for Aspiring Entrepreneurs for Creating This Essential Component of Business Plans Using E-Spread

Pro forma financial statements are essential elements of a business plan. This accounting worksheet approach provides a practical, step-by-step method to prepare the statements. Using an e-spreadsheet application automates the process, making it simpler, faster, and more accurate.

First prepare all of the other sections of the business plan: Executive Summary, Business Description, Products or Services, Market Study, Organizational Structure, Financial Plan, and Personnel Resum s. Then the pro forma financial statements translate the other components of the business plan into quantitative tables.

There are three pro forma financial statements: (1) Income Statement & Changes in Owner's Equity, (2) Balance Sheet, and (3) Cash Flow. The statements are prepared month by month for the first fiscal year, and then by quarters for subsequent years.

The pro forma statements allow the entrepreneur to tinker with the assumptions in the business plan: sales price, expenses, investments, etc. Once the statements are set up in an e-spreadsheet, changes in any assumption cascade through the whole worksheet.

The statements are also crucial elements of business plans presented to potential investors or lenders. An e-spreadsheet approach makes it possible to create attractive, informative pro forma financial statements.

Author: Michael Ray Worthington
Publisher: Createspace Independent Publishing Platform
Published: 01/02/2017
Pages: 52
Binding Type: Paperback
Weight: 0.27lbs
Size: 10.00h x 7.99w x 0.11d
ISBN13: 9781983443664
ISBN10: 1983443662
BISAC Categories:
- Business & Economics | Entrepreneurship

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