Pro forma revenue assumptions

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January 05, 2026

by a searcher from University of Miami in Indianapolis, IN, USA

When building a pro forma to include downside case, base case, and better case, what is the standard assumption for monthly revenue growth/decline? For example, when modeling a 10% revenue decline in Y1, one can model .83% decline for 12 months, a 10% decline in one month with all other months remaining flat, etc. Likely it is neither scenario, so I'm curious how others approach this.
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Reply by a searcher
from Northern Illinois University in Chicago, IL, USA
I agree with both Josh and Kevin. Each business is different and you need to evaluate on the merits of the business and industry. In most cases, the base case tends to be overly positive and should probably be more in-line with what has been traditional performance of the company less some amount in yr 1 due to the disruption caused by the acquisition
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Reply by a searcher
from University of Wisconsin in Orange County, CA, USA
I'd personally keep it simple and just apply a 0.83% decline or increase each month. Of course the actuals won't turn out exactly that way, but it's a projection and everyone knows that it's just a best guess. That said, if you're looking to model a downside case, a 10% decrease really isn't that much - should you be stress testing the business with a bigger decline? Depending on your customer concentration, it may not be too far fetched that downside revenue could be much lower.
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