posted by evelyn on .
pro forma financial statements are
a. the most comprehensive means of financial forecasting
b. often required by prospective creditors
Thank you for using the Jiskha Homework Help Forum. Here is a definition of Pro Forma Financial Statements: Definition
Financial statements as adjusted to reflect a projected or planned transaction.
A Latin term meaning "for the sake of form". In the investing world, it describes a method of calculating financial results in order to emphasize either current or projected figures.
Pro forma financial statements could be designed to reflect a proposed change, such as a merger or acquisition, or to emphasize certain figures when a company issues an earnings announcement to the public.
Investors should heed caution when reading a company's pro-forma financial statements, as the figures may not comply with generally accepted accounting principles (GAAP). In some cases, the pro-forma figures may differ greatly from the those derived from GAAP.