answersLogoWhite

0


Best Answer

Proforma income statements often are used as planning tools and financial analysis. They usually are based on past information. But they can be drawn by estimating and making assumptions based on figures and results in other, similar situations.

Proforma income statements project expenses and revenue into the future for a specified number of quarters or years. They often are created for making significant decisions, such as launching a new product line, expanding production, considering a merger, etc.

For more information, go to aaupwiki.princeton.edu/index.php/Proforma_Financial_Statement.

User Avatar

Wiki User

14y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: Why use a proforma income statement?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

How do you treat business plan in accounting?

one compares the proforma to the current income statement and balance sheet.


Total production costs should be equal to cost of goods sold in the proforma income statement. True or False?

False


What is a Pro-forma contribution margin income statement?

Proforma contribution margin income statement Sales revenue xxxxLess: Variable cost xxxxContribution margin xxxxLess: Fixed Cost xxxxprofit (Loss) xxxx


How do you write a financial future for a business plan?

it is called a "proforma." it looks like an income statement covering 5 yrs, 1-3 yrs, by the year and last 2, combined


3 In developing of the proforma financial statements the last step in the process is the development of the?

statement of retained earnings


What is material gain from land for public use is reported on the income statement as?

rental income


How do you do Income statement?

Comparative income statement is same as normal income statement with little addition of that income statement as well from which comparison is required.


What is the definition of performa?

Performa is a mis-spelling of proforma. Use Proforma: Description of financial statements that have one or more assumptions or hypothetical conditions built into the data. Often used with balance sheets and income statements. Example: Provided to show rent or income projections upon acquisition of Commercial Real Estate, or a Business so as to justify obtaining of financing for the purchase - Used to demonstrate the Borrower's ability to repay the loan based on income projections taking into account Mortgage or loan terms, and actual or projected income based on reasonable and qualified assumptions.


How do you prepare comparative income statement?

Comparative income statement is same as normal income statement with little addition of that income statement as well from which comparison is required.


What are the two categories of the income statement?

Following are two catagories of income statement: 1- Single Step Income statement 2- Multy-step income statement


Is income statement same as financial statement?

no. income statement is a only a statement in financial statements.


What is a projected income statement?

projected income statement is the estimated income statement to estimate the future business position.