Projected Balance Sheet
Projected balance sheets, or pro forma balance sheets, are the statements that show estimated changes to a company's financial status, including investments, other assets, liabilities and financing for equity. Company owners or accounting professionals perform projections to understand more about the business and anticipate income and expenses for a future period of time. Here are the descriptions of the main line items you'll likely find on a projected balance sheet:
Assets
A business asset is anything that a company owes. Assets usually affect the perceived and calculated value of a business and can fall into different categories, like fixed, tangible, intangible, operating and non-operating. Some examples of assets include items like machinery, computer software, office equipment, intellectual property and any cash.
Liabilities
A company's liabilities are those line items that the organization owes. Some common liabilities include mortgage debt, employee wages the company owes, owed taxes and any items that appear on the accounts payable sheet that indicates what the company need to pay to vendors and suppliers.
Equity
Equity is the amount that company shareholders would receive if all liabilities are paid. You can calculate equity by subtracting a company's total liabilities from its total assets. For example, if the total liabilities for a business equals 100,000 and the total assets equal 120,000, then the equity in the business is 20,000.
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