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Proforma BS question

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  • 03-07-2019 8:20am
    #1
    Snorlaxx
    Registered Users Posts: 231 ✭✭


    We have to create a proforma Balance Sheet from a cash flow and P&L we have for five years.

    The only time we put in cash is in Year 1, as we are forecasting profits annually.

    So do we leave cash clear for all years after year 1, or is the closing balance from the previous year the Cash amount(I know this is usually the opening balance, but theres no OB on pro forma BS's) for the next?


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    #2
    onlinepal100
    Registered Users Posts: 36 ✭onlinepal100


    Surely the cash you introduce one day 1 is eaten up in running the business so leaving that on the BS would not be correct.

    On the basis that you make profits in each year, some of which are used to drive the business for the next year, the "Cash" or "Bank" balance will be the residual funds available at the end of each year.


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    #3
    Snorlaxx
    Registered Users Posts: 231 ✭✭Snorlaxx


    So we just leave cash as 0 for all years.
    This is for a service not manufacturing or product as such so its more difficult to create


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    #4
    StringerBell
    Registered Users Posts: 14,050 ✭✭✭✭StringerBell


    I don't understand, you have never put cash in other than year 1, you make profit but don't have any left after investing them in the business? Did you use all the cash you put in in year 1? If not you put in whatever was left + any extra in year 2 and so on.

    "People say ‘go with the flow’ but do you know what goes with the flow? Dead fish."



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