Which type of financial statements are forecasted to assess the potential financial performance of a property?

Pro forma financial statements are specifically designed to project the future financial performance of a property or business under certain assumed conditions. These statements incorporate estimates and projections based on variables such as anticipated rental income, operating expenses, and potential market changes. By using pro forma statements, analysts and investors can assess how a property is expected to perform financially over time, which is crucial for decision-making in real estate investments.

In contrast, balance sheets provide a snapshot of a property's financial position at a specific point in time, showing assets, liabilities, and equity, but they do not forecast future performance. Income statements summarize revenue and expenses over a period, reflecting past performance rather than future projections. Cash flow statements track the actual inflows and outflows of cash over a specific period, again focusing on historical data rather than forecasting. Therefore, pro forma financial statements are the most appropriate tool for assessing the potential financial performance of a property.