Analyzing Pro Forma Statements

Analyzing Pro Forma Statements
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Analyzing Pro Forma Statements
Pro forma statements of 5-year projections
A pro forma balance sheet is analogous to a historical balance sheet, except that it projects the future instead of tracking the past. It is a vital tool that can be utilized to plan future business operations (Scheid, 2010). The initiative to be implemented is corporate expansion. The following a pro forma balance sheet for a five-year period.
Pro Forma Balance Sheets Years 0 through 5Year 0Year 1Year 2Year 3Year 4Year 5ASSETSCurrent AssetsCash10,52515,26122,12832,08646,52567,461Accounts Receivable27,00039,15056,76882,313119,354173,063Inventory30,00039,90053,06770,57993,870124,847Prepaid Expenses2,0002,3002,6453,0423,4984,023Total Current Assets69,52596,611134,608188,020263,247369,414Fixed AssetsProperty – net of depreciation 215,000195,650178,042162,018147,436134,167Equipment – net of depreciation80,00073,60067,71262,29557,31152,727Vehicles – net of depreciation5,0004,6504,3254,0223,7403,478Total Fixed Assets300,000273,900250,079228,335208,487190,372Total Assets369,525370,511384,687416,355471,734559,786LIABILITIESCurrent LiabilitiesRevolving lines of credit20,00022,40025,08828,09931,47035,247Accounts Payable5,0005,7506,6137,6048,74510,057Current Portion of Long-Term Debt15,00015,75016,53817,36418,23319,144Total Current Liabilities40,00043,90048,23953,06758,44864,448Long-Term Liabilities Long-term debt and capital leases45,50053,00861,75471,94383,81497,643Loans payable to stockholders60,50065,03869,91575,15980,79686,856Total Long-term Liabilities106,000118,046131,669147,102164,610184,499Total Liabilities146,000161,946179,908200,169223,058248,947Stockholders EquityCommon Stock1,0001,0001,0001,0001,0001,000Additional Paid-in Capital25,00028,00031,36035,12339,33844,059Retained Earnings (Cum from prior years)53,19058,50964,360
70,79677,87585,663Retained Earnings (From current P&L)144,335160,212 177,835197,397219,111243,213Total Stockholders Equity223,525247,721274,555304,316337,324373,935Total Liabilities and Stockholders Equity369,525409,667454,463504,485560,382662,882
Assumptions
Cash will increase by 45% each year from year 1 through 5. Accounts receivables will increase by 40% each year. Inventory will increase by 33% each year. Prepaid expenses will increase by 15% each year. Property depreciates by 9% each year. Equipment depreciates by 8% each year. Vehicles depr...