Top Notch Define Pro Forma Financials

Pro forma financial statements Definition.

Define pro forma financials. Pro Forma Financial Statement A financial statement that a company prepares to consider the effects of a potential activity. Pro-forma earnings most often refer to earnings that exclude certain costs that a company believes result in a distorted picture of its true profitability. Pro-forma earnings are not in compliance.

In accounting pro-forma financial statements are hypothetical financial reports that show either forecasts of or alterations to actual financial statements. Its a tool that business owners decision-makers stakeholders investors creditors and others use to examine hypothetical conditions. A pro-forma forecast is a financial forecast based on pro-forma financial statements.

Adjective made or carried out in a perfunctory manner or as a formality. Pro Forma Financial Statement A financial statement that a company prepares to consider the effects of a potential activity. It usually takes into account historic relationships anticipated changes in these.

As we said a pro forma statement is a look at a what-if scenario. A pro forma statement is a financial statement prepared as a projection of the future. Definition of Pro Forma Financial Statement A pro forma financial statement is one based on certain assumptions and projections as opposed to the typical financial statement based on actual past transactions.

Proforma financial statements are based on various budgets and forecasts. Provided in advance so as to prescribe form or describe items. What is a Pro Forma Financial Statement.

Done as a formality. For example if a company is considering acquiring another it may prepare a pro forma financial statement to estimate what effect the acquisition would have on its own financial circumstances. The pro forma accounting is a statement of the companys financial activities while excluding unusual and nonrecurring transactions when stating how much money the company actually made.