[Verse 1] Starting with the numbers from the past three years Income statements, balance sheets, make the picture clear Revenue growth patterns and expense trend lines Historical data becomes our guide to future signs Take the sales we've recorded, find the average rate Monthly seasonality helps us calculate [Chorus] Forecast forward, project ahead Pro-forma statements, that's what we said Income, balance, cash flow too F-O-R-E-C-A-S-T, that's what we do Historical trends plus assumptions new Building tomorrow from what we knew [Verse 2] Income statement first, let's project the sales Using growth percentages, following the trails Cost of goods sold moves with revenue Fixed costs stay stable, variable costs grew Operating expenses, interest, and tax Pro-forma income shows where profit tracks [Chorus] Forecast forward, project ahead Pro-forma statements, that's what we said Income, balance, cash flow too F-O-R-E-C-A-S-T, that's what we do Historical trends plus assumptions new Building tomorrow from what we knew [Verse 3] Balance sheet projection needs a careful hand Assets, liabilities, equity planned Working capital ratios from the past Help us estimate what inventory lasts Accounts receivable days and payable terms Cash requirements, that's what we learn [Bridge] Sensitivity analysis, change one thing See how different assumptions make numbers swing Best case, worst case, most likely scene Pro-forma helps us see what future might bring [Chorus] Forecast forward, project ahead Pro-forma statements, that's what we said Income, balance, cash flow too F-O-R-E-C-A-S-T, that's what we do Historical trends plus assumptions new Building tomorrow from what we knew [Outro] Cash flow statement ties it all together Operating, investing, financing weather Free cash flow projection shows the health Pro-forma forecasting builds financial wealth
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