Profit Planning (Pro-forma Income Statement)

Profit Planning (Pro-forma Income Statement)

    • The sales forecast and corresponding costs and expenses are the major inputs to a Profit Plan. Why is profit planning important? It enables the entrepreneur to see the complete picture and to analyze how each cost and expense item behaves in relation to changes in the level of sales. Budgeted amounts are then compared with actual results and variances are analyzed and corrected.

Last modified: Friday, 15 June 2012, 10:17 AM