Financial managers can really make a difference in their business practices by using financial statements. Pro forma statements assist managers in planning the company’s finances in term us finically necessity. A forecast of these numbers can be seen by using a balance sheet as well as prior year income kin order to estimate future earnings. For an organization to see what must be done total assets must be equal to the sum of total liabilities otherwise this will require further evaluation by management.
Pro forma statement are very useful in the planning and execution of inventory as well as employment needs ultimately it can be used as a problem solving or prevention aid. While in the developmental stages managers must find potential error or possible areas of default in order to prevent them. By analyzing the company’s financial, managers are able to handle the potential problem before they happen which again can be a preventative measure. By doing so managers can anticipate potential failure as well as opportunities that arise.
My company Corvin Dallas plans to increase sales of its children and Adult diaper line by making cost more affordable which will drive the revenue back into the business, Because Child and Adults will always have a need for these products, it will be something that will grow in the years to come. We will use our product development cost in order to develop a new type of diaper/depends that will be able to be worn and will absorb as much moisture a possible for a more comfortable fit and a product that last longer than their competitors.
In the pro forma statement below it shows where and how I plan to make the difference in the company will make as far as sales and their profit. The income statement is important so financial manager can see where their money is going/coming from.
Pro Forma Income Statements – Years 1 - 5