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Business Technology

This document highlights the significance of Pro Forma financial statements in business forecasting, including the Pro Forma Cash Flow Statement, Income Statement, and Balance Sheet. Pro Forma statements serve as valuable tools for businesses to assess expected cash flows, revenues, and financial positions. The Cash Flow Statement analyzes incoming and outgoing cash, distinct from profits, while the Income Statement illustrates revenue and expenses, revealing potential profit or loss. Lastly, the Balance Sheet provides insights into a company’s assets, liabilities, and equity, aiding strategic financial decision-making.

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Business Technology

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  1. Business Technology Mr. Bernstein Greene, pp 246-252: Pro Forma Financial Statements December 4, 2013

  2. Business TechnologyMr. Bernstein How Much Money Do You Expect Your Business To Make? Pro Forma = “for the sake of form” or “as a matter of formality” Three important Pro Forma Statements: Pro Forma Cash Flow Statement Pro Forma Income Statement Pro Forma Balance Sheet

  3. Business TechnologyMr. Bernstein Cash Flow Statement Describes cash flows into and out of the business, known as receipts and disbursements Cash flows are NOT the same as profits or even revenues and expenses – there are many non-cash revenues and expenses: Purchases on credit (accounts payable), depreciation Sales on credit (accounts receivable)

  4. Business TechnologyMr. Bernstein

  5. Business TechnologyMr. Bernstein Income Statement Shows revenues and expense over time Produces the Profit or Loss for the time period Includes revenues you have not yet received and expenses you have not yet paid Key Entries: Revenue Cost of Goods Sold Gross Profit Operating Expenses Income before Taxes Taxes Net Income after Taxes

  6. Business TechnologyMr. Bernstein Comparing Income Statements shows trends …how is this helpful?

  7. Business TechnologyMr. Bernstein Balance Sheet Lists what the business owns and what it owes Assets = Liabilities + Owner’s Equity Assets: Cash, Equipment, Inventory, Accounts Receivable Liabilities: Long-term, Short-term loans, Accounts Payable

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