What is a proforma income statement? What forecasting techniques … - Vidyadip

Question

What is a proforma income statement? What forecasting techniques can be adopted to make it?

✓

Answer

Proforma income statement is a projected net profit calculated from projected revenue minus projected costs and expenses. It summarises all the profit data during the first year of operations of the new enterprises.
Following are the most commonly adopted techniques for forecasting:

Marketing research.
Industry sales.
Survey of buyer's intentions.
Expert opinions.
Financial data on similar start-ups.
Some trial experiences of self or others.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "3 Marks Question" from Entrepreneurial Planning→Entrepreneurial Planning — all question types→Entrepreneurship STD 12 Commerce question papers→CBSE Board STD 12 Commerce question papers→CBSE Board question paper generator→

Similar questions

Designing a mobile phone that can also take photograph is an example of which concept? Identify it and explain it.

Financial GamingGoogle purchased Motorola Mobility for 9800000000 (in USD), Microsoft Corporation purchased Skype for 8500000000 (in USD) and Nokia handset and Service business for 720000000 (in USD) as notable merges and amalgamation of 2011 because latters were in financial crisis and formers were financial strong looking for expansion strategies.
What is the reason for the above mergers and acquisitions?

How cash flow projections will be helpfulfor an entrepreneur? What values can lead to a successful implementation ofthese programmes?

Naman, Arpit and Ramesh are in a partnership business and operate a retail jewellery store. They plan to prepare a budget for the year 2015-16 but since, they are preparing a budget for the first time, explain to them the different steps of the budgeting process. Which value is exhibited by them for preparing a budget?

Explain briefly the concept of operating cycle.

For what purpose is finance required right from the very beginning, i.e. conceiving an idea?

Explain with example how 'Existing Products or Services' help in generation of ideas.

What is called the stage of consolidation for an enterprise?

Entrepreneur ensure the selection of best overall mix of financing. Why?

Naveen after completing his M. Tech in Nano Technology wanted to start his own business. He thought to manufacture sophisticated instruments used in surgery. He knew that his knowledge of Nano Technology will help him in manufacturing these instruments. According to him such instruments will help the surgeons to operate upon the patients with accuracy, with minimum blood loss and quick post operation recovery; Such types of instruments are used in advanced countries only and there was a risk in marketing the same. The cost price of machinery required, for manufacturing such instruments was very high and more research was required in this field of Nano Technology. For seed funding, Naveen approached 'Himani Capital Ltd.' who finance such types of projects. 'Himani Capitals Ltd.' after analysing the proposal agreed to provide seed capital to Naveen.
Explain the different stages of 'Early stage financing' to seek venture capital finance after the one discussed above.