Pro Forma Balance Sheet

Now that we have completed the purchase price allocation and specified our financing arrangements, we can enter all the adjustments needed to go from the LTM balance sheet to the pro forma balance sheet at closing. We begin by adding lines to the balance sheet we set up previously that reflect changes in the capital structure (i.e. new debt and/or preferred stock), then enter the adjustments by linking to cells in our selected financing scenario and purchase price allocation.


Try Macabacus for 10x Productivity

Join the 80,000+ finance & banking professionals using Macabacus to get more done in Microsoft Office.

Start your Free Trial

Recall that our financing expenses were capitalized and will be amortized over time. Transaction expenses, on the other hand, are expensed immediately under FAS 141r. Therefore, capitalized financing costs appear as an asset on the balance sheet, while transaction expenses reduced retained earnings. Note that we also wipe out existing shareholders’ equity, since we are purchasing it and replacing it with new equity.

To be sure that you entered the balance sheet adjustments properly, check that the pro forma balance sheet balances.

Download Template

Pro Forma Balance Sheet

Try Macabacus for free to accelerate financial modeling in Excel.

Discover more topics

Build an operating model
In this tutorial, we will walk through how to build a general industry business operating model.
Read more
Build an M&A model
In this section, we demonstrate how to model a merger of two public companies in Excel.
Read more
Build an LBO model
In this tutorial, we will walk you through building an LBO model in Excel.
Read more
Asset and Stock Deals
The first step in purchase price allocation, or PPA, is to determine the purchase price.
Read more