Pro forma means “ projected,” as opposed to actual. The pro forma balance sheet projects what the financial condition of the venture will be at a particular point in time. Pro forma balance sheets should be prepared at start- up, semiannually for the first years, and at the end of each of the first three years. The balance sheet details the assets required to support the projected level of operations and shows how these assets are to be financed ( liabilities and equity). Investors will want to look at the projected balance sheets to determine if debt equity ratios, working capital, current ratios, inventory turnover, and so on are within the acceptable limits required to justify the future financing projected for the venture.