Pro Formas
                              Results
                         • Pro Forma Statements
                           Cash Flow
                           Use of Funds
                           Income Statement
                           Balance Sheet
                         • Financial Ratios
                         • Levelized Costs
                         • Life Cycle Cost Analysis
                           Net Present Value
                           Internal Rate of Return
                           BC Ratio
                           Discounted Payback
         What Are Pro-Formas?
   • Pro formas are standard financial statements commonly 
    used by investors for 
     valuation, 
     risk evaluation, and 
     investment purposes.  
   • They provide insight into
     how project will generate income
     a firm’s ability to repay debt, 
     cash flow and cash available to provide equity investors a return 
           Are they important?
  Examples of the importance placed on pro formas by 
  financial professionals.
 • The Financial Accounting Standards Board standards 
  require firms to prepare and report a statement of cash flow.  
 • Lenders often will not fund a project without cash flow 
  statement because it demonstrates a company’s ability to 
  meet its obligations and finance operations.
                                            Pro Formas
       Reports - Pro Forma Statements
     • Cash flow statement
        • Shows how the project makes a profit for each project year
     • Income Statement
        • Shows the project’s financial performance for each project year
     • Balance Sheet
        • Shows the project’s financial position for each project year
     • Use of Funds Statement
        • Shows how fund sources are used for each project year
     Using reports:
        Gain understanding of modeled results
        Supporting data for project proposals
        Project prioritization, funding decision support
                                  Pro Formas
           Cash Flow Statement
              How the project makes a profit
                            Inflows & Outflows
                            • Operations
                            • Financing 
                             Activities