What is a key feature of an operating budget/pro-forma statement?

An operating budget, or pro-forma statement, primarily serves as a tool for projecting future income and expenses for a property. This forward-looking financial statement estimates the expected revenues and costs associated with operating the property over a specific period, typically on an annual basis. By outlining anticipated rent income, operating expenses, and other revenue or cost projections, it helps property managers and owners plan strategically, make informed decisions, and assess the financial viability of their property investments.

While understanding past performance, break-even analysis, and cash flow are important aspects of property management, they are not the primary function of an operating budget. Instead, the focus of an operating budget is on forecasting, enabling stakeholders to prepare for the financial dynamics that lie ahead.