Now you have to liquidate inventory, sell your machinery, and wind down relationships with cat widget vendors. The loss your business incurs because of the cat widgets really makes a big dent in your income, so you decide to stop manufacturing and selling cat widgets. ![]() ![]() Over a period of 6 months, you realize that the widgets for cats are just not selling. You make widgets for kids, widgets for adults, widgets for dogs, and widgets for cats. Let’s say your business manufactures and sells widgets to the general public. When Would I Need A Pro Forma Income Statement? In other words, it’s a way to show what the income of the business would be if some costs were excluded. ![]() A pro forma income statement is a document that shows a business’s adjusted income if certain financial inputs were removed.
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