USA Pro-forma statements

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In business plans, are pro-forma statements supposed to show promises of what your business intends to do in it's first few years of operation after opening? Or are they supposed to show estimates of what you would need to do to achieve various results?

Various results would be to break even, make a 10% profit, or a 20% profit as examples. Proforma statements I'm talking about are ones that would be drafted to present to banks to receive loans, or investors to receive funding.

What about what would happen to the business under various scenarios -- like if the business broke even after a certain amount of time, made a 10% profit, or made a 20% profit?

What are pro-forma statements supposed to show?
 

kirby

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Proforma statements are prepared to show how the financial statements WOULD HAVE looked if a certain transaction or set of transactions had actually happened and been included in the financials OR if a certain transaction or set of transactions that DID happen and were included in the financials WERE NOW EXCLUDED from the financials. So, yes, to the other parts of your question you use this as a "things will look like this" report.
The SEC will require pro-forma statements in certain cases. For example if shortly after year end and before the financials for that year are issued a huge transaction affecting the company happens, like a major acquisition. SEC also warns companies not to get unrealistic in pro forma presentations because that could mislead investors.
 

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