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Work the arithmetic through to the bottom to complete a pro forma income statement.
How to prepare a proforma income statement example. Create a pro forma income statement by using the calculated percentage change in sales. Sit down with an income statement from the current year. Pro forma income statement is the statement prepared by the business entity to prepare the projections of income and expenses which they expect to have in the future by following certain assumptions such as competition level in the market size of the market growth rate etc. Once a percentage is determined it should be applied to both the revenues and cost of goods sold of the business in its last income statement.
Consider how each item on that statement can or will be changed during the coming year. In this example you would multiply all of last year s income statement line items by 1 10 to show a 10 increase. 1 pro forma of historical profit and loss statement.
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