Pro forma earnings example from a mobile app business plan

Lesson Details:

Video Transcription: Now I want to give you an example of how to calculate pro forma earnings or revenue and it's a weird term and sometimes confusing to people but it really just means your future projections and if you're starting your business it's really almost impossible to have projections because you don't know you don't have anything to base it on you don't have a history right so the really when you need it is if you have a real operational business at the moment and then you can base your future projections based on some actual history like maybe did you make a dollar or a million dollars last year if you have a new business yeah I have no history but if you have an existing business you have a really good sense of where you are currently and so for that reason it's easier to base where you're going and you can also see your current growth rates and so you base it on that and this is actually what I did in this business plan here in the revenue an area right so again these are fictitious figures because I'm private about my actual finances naturally but you can see that for our purposes I gave my revenue for this year here and based on growth projections I projected next year's revenue right and it's as simple as that and of course you can project the costs you can then project because you have the projected revenue projected costs then you also can project your income and profitability for next year as well but it's based on previous history right so that's how you do that.