What is the purpose of a Pro-forma in a building project?

A Pro-forma serves a crucial role in the initial stages of a building project by providing a comprehensive financial analysis. Its primary purpose is to estimate the anticipated costs and revenues associated with a project, enabling stakeholders to assess its financial feasibility. This document typically outlines all projected expenses, such as construction costs, financing, and operational costs, alongside potential income sources, like leases or sales revenue. By analyzing this information, project developers can make informed decisions regarding investments, budgeting, and overall viability.

A financial analysis through a Pro-forma is essential, as it aids in identifying risks and projecting cash flow, which is vital for successful project planning. This foresight can inform whether adjustments are needed in design or scope to make the project economically viable before significant resources are committed.