Pro Forma Statement of Cash Flows

Projected statement of cash flows. As with the regular statement, it classifies cash receipts and disbursements depending on whether they are from operating, investing, or financing activities. The direct presentation reports the major classes of gross cash operating receipts and payments and the difference between them. The indirect presentation reconciles net income with net operating cash flow. The reconciliation requires balance sheet data, such as the changes in accounts receivable, accounts payable, and inventory, as well as net income. Thus, all the pro forma statements are interrelated. For example, the pro forma cash flow statement will include anticipated borrowing. The interest on this borrowing will appear in the pro forma income statement.

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