Property Management
What is a 'pro forma' financial statement in commercial real estate property management?
AA required IDFPR financial disclosure for commercial property sales
BA projected financial statement showing expected income, expenses, and cash flow for a property✓ Correct
CA historical statement showing actual property performance over 5 years
DA bank statement confirming property management trust account balances
Explanation
A pro forma is a projected financial statement that estimates a property's future income (rents), vacancy, operating expenses, and net operating income. Investors use pro formas to evaluate potential investments and forecast returns. Property managers prepare pro formas for owners showing expected performance. Pro formas should be clearly labeled as projections and based on realistic market assumptions.
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