Budgeted income statement

Budgeted income statement, also called the pro-forma income statement, is the summary output of the operating budget cascade.

Also known aspro forma income statement

ByHoang TruongUpdated June 30, 2026

FrameworkMaster budgeting

See it move

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A waterfall begins at budgeted revenue of €500,000, subtracts cost of goods sold of €310,000 and selling and administrative expenses of €70,000, arriving at a budgeted net income of €120,000. The chart shows how figures from the sales, production, and overhead budgets converge into a single forward-looking profit figure.

Where it fits

SubjectManagerial AccountingCoreTopicBudgeting & the Master BudgetCore

The formula

LaTeX

NI_{budget} = Rev_{budget} - COGS_{budget} - SGA_{budget}

Variables

$N I_{b u d g e t}$: Budgeted net income (before tax) (€)
$R e v_{b u d g e t}$: Budgeted revenue (€)
$C O G S_{b u d g e t}$: Budgeted cost of goods sold (€)
$S G A_{b u d g e t}$: Budgeted selling and administrative expenses (€)

The pro-forma income statement consolidates the revenue, production cost, and operating expense budgets.

Check yourself

PracticeCORE

A company's operating budgets show: budgeted revenue €500,000; budgeted cost of goods sold €300,000; budgeted selling and administrative expenses €80,000. What is the budgeted net income before tax?

Select an answer to check your understanding.