A pro forma income statement. Pro forma is a latin term that describes a method of calculating and presenting financial results to emphasize either current or projected figures. The common objective of a pro forma document is to give a fair idea of the cash outlay for a shipment or an anticipated occurrence. In ralph estess dictionary of accounting mit cambridge 1981 p. Accounting budgeting and financial management budgeting and financial accounting.
Financial forecasting describes the process by which firms think about and prepare for the future. For example a corporation might want to see the effects of three different financing options. Jaxworks pro forma income statement xyz inc. Assumed forecasted or informal information presented in advance of the actual or formal information.
Contents pro forma financial information ii 531 pro forma income statement required for all periods presented 27. Financial pg 1 1 planning and forecasting version 10 1. Financial planning and forecasting 11 pro forma financial statements financial statements projections and forecasting are very common in corporate financial analysis. 105 a pro forma financial statement is defined as a financial statement prepared on the basis of some assumed events and transactions that have not yet occurred.
What are pro forma financial statements. Now that we have completed the purchase price allocation and specified our financing arrangements we can enter all the adjustments needed to go from the ltm balance sheet to the pro forma balance sheet at closing. Pro forma are usually made for accounting purposes as a record of a companys various financial transactions. Latin for according to form or for.
John rollins yale university press the aaup business handbook part two. A pro forma is any kind of document which is given as a formality or courtesy and contains information about a particular event.