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Financial Management: Creating Pro Forma Statements

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Consider the following simplified financial statements for the Fire Corporation (assuming no income taxes):

Income Statement Balance Sheet
Sales $ 46,900 Assets $ 22,700 Debt $ 6,700
Costs 41,140 Equity 16,000
Net income $ 5,760 Total $ 22,700 Total $ 22,700

The company has predicted a sales increase of 18 percent. It has predicted that every item on the balance sheet will increase by 18 percent as well.

Create the pro forma statements and reconcile them.

Pro forma income statement Pro forma balance sheet
Sales $ Assets $ Debt $
Costs Equity
Net income $ Total $ Total $

What is the plug variable?
The plug variable is in the amount of $ .

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Solution Preview

Sales $ 46,900 Assets $ 22,700 Debt $ 6,700
Costs 41,140 Equity 16,000
Net income $ 5,760 Total $ 22,700 Total $ 22,700

Pro forma income statement Pro forma balance sheet
Sales $ ...

Solution Summary

The expert creates pro forma statements for financial management.

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See Also This Related BrainMass Solution

Pro forma Financial Statements

I need to complete a set of proforma financial statements using the attached mini case study. I also need to answer a few questions about the financial statement. I will attach the case study in adobe. It begins on pg 99 and is about a company Home Safety Inc. the finacial statements need to be done in Microsoft excel. I will also provide some check figures that my teacher provided below.

Mini-Case Study: Home Safety, Inc

2003 est
Net Income $8,230
Total Assets $98,988
Total Liabilities $48,910
Cashflow from Operating Activities ($17,323)
Cashflow from Investing Activities ($15,998)
Cashflow from Financing Activities $33,736

These are the four questions that need to be answered.

1) How much revenue growth is needed to achieve the desired profitability?

2) Based on your review of the pro forma financial statements, what general observations and recommendations can you make?

3) Do you believe that these pro forma statements will meet the company's overall goals and objectives? Why or why not?

4) What other assumptions and considerations are necessary for this plan to work?

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