Pro Forma Financial Statements - Continued...

A pro forma financial presentation is an estimate of the operating and non-operating cash flows of a business based upon an assumed set of circumstances which are empirical in nature (hence the term, "empirical assumptions").  A set of circumstances are assumed to exist at each stage of the reporting from pre-construction, through construction and then the remaining balance is usually devoted to operations.  Looking at it from a commercial real estate development financing prospective, the pro forma financial presentation is the second step in the overall due diligence process.

The first step is the market feasibility study because the success (or failure) of a business enterprise in market capitalism is based upon the expectations of consumers within a defined geographical area and industry.  That's a pretty fancy way of saying that since consumers pick the winners and losers in business by virtue of their wallets (and where they spend that cake), so the first step is to find out what consumers want - hence the market feasibility study.  But the market feasibility study goes a bit further than that because the study will tell the developer what revenues the project is likely to generate.  Once you know how much revenue is available, the size and scope of the project is limited to that the revenue stream will support.

The market study provides the critical information that is then "translated" into the financial results of the ongoing operations.  Once the ongoing operations are understood, the capital financing plan is created and then a consolidation can be done.

Doesn't this just make your head spin with excitement?  Me neither.  

The reality is that Rainmaker Marketing Corporation can take the guess work out of a ton of due diligence reporting for you exclusive benefit, so stop stumbling around and pick up the phone and call us.