Pro Forma

A financial statement or model built on projected assumptions about future revenue, costs, and scenarios, used to plan, pitch, or evaluate decisions before they occur.

Pro forma analysis allows founders to stress-test business decisions, model what-if scenarios, and present investors with credible financial projections without relying solely on historical data.

A founder creates a pro forma income statement showing projected revenue and costs for the next 12 months under three scenarios: conservative, base case, and optimistic. She uses it to set a fundraising target and plan hiring decisions.