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August 28, 2008

What are pro forma financial statements?

A pro forma financial statement is one based on certain assumptions and projections.

For example, a corporation might want to see the effects of three different financing options. Therefore, it prepares projected balance sheets, income statements, and statements of cash flows. These projected financial statements are referred to as pro forma financial statements.

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19 Responses to “What are pro forma financial statements?”

  1. mao bena on September 4th, 2008 2:22 am

    Now , I am lecturing for Program BBA , finance and accounting i need some matterial for instructuring the student

  2. jaffet on September 4th, 2008 5:53 am

    I am prepare for the test

  3. sadaqat khan on September 4th, 2008 10:19 am

    i think it means .In accounting, pro forma earnings are those earnings of companies in addition to actual earnings calculated under the Generally Accepted Accounting Principles in their quarterly and yearly financial reports.The pro forma accounting is a statement of the company’s financial activities while excluding “unusual and nonrecurring transactions” when stating how much money the company actually made. Expenses often excluded from pro forma results include company restructuring costs, a decline in the value of the company’s investments, or other accounting charges, such as adjusting the current balance sheet to fix faulty accounting practices in previous years. or
    A financial statement constructed from projected amounts. A firm might construct a pro forma income statement based on projected revenues and costs for the following year. Likewise, a firm may wish to develop a set of pro forma statements to determine the effect of a projected stock buyback.

  4. Srabani on September 4th, 2008 1:48 pm

    i want to know how to make projected balance sheet?

  5. abebe on September 5th, 2008 1:23 am

    Thank you I need some clarification on fund accounting.

  6. Megha on September 5th, 2008 5:25 am

    I understood it, but one doubt ….i.e. is this pro forma is made only of Projected data(future data assumptions) or it is based on actual financial data also.

  7. Shamili on September 5th, 2008 5:39 am

    praforma is done for projected data only.

    It can also be used for comparing the projections & actuals.

  8. kesselly on September 5th, 2008 9:22 am

    I will like for you to please made some clarity on proforma financial statement.

  9. ali and mataan on September 5th, 2008 9:25 am

    my name is Ali hirsi iam student in simad somali institute of management and development in accounting department i have good mark. although iam very interesting to help me such questions and answer and i will thanks you for pervious acccepting

  10. Banjo on September 5th, 2008 8:55 pm

    Pro forma financial statements is used by companies for decision making purposes. It will reflect projected income or projected expenses to which options they would choose, given the options

  11. Dinesh on September 16th, 2008 6:46 am

    Pro forma financial statement is made for future forecase for taking decision to run the business.

  12. ray on September 17th, 2008 1:19 pm

    hi,i would like to get relevant information about company accounts.thx

  13. Akkash on September 24th, 2008 1:55 am

    Hi my Nickname is Akkash. I am the student of B.Com from Allama Iqbal Open University situated in Islamabad. Please I need some Help about Accountings, because i am a Private student. You know As appear a Private student it is very diffcult to understand the accounting terms. Especially Specimens like Income Statement, Balance Sheet, Cash and Receipt Payments etc.
    in the end can You help me in the following above mentions items & others? Please

  14. michael on March 6th, 2009 10:54 pm

    i am setting up to businesses and need coaching
    mg

  15. Manny on October 26th, 2009 5:30 pm

    Heading is part of Balance Sheet presentation. Are commitments and contingencies also part of Balance Sheet?

  16. kotireddy gade on October 30th, 2009 9:20 am

    Hai Sir my Name is Kotireddy Gade, i have don MBA Finance in Ousmania University, Hyd. But i attend the one interview, we are asking one question wt is use of trial balance? plz give me the Answer clearly.

  17. kotireddy gade on October 30th, 2009 9:22 am

    hi,i would like to get relevant information about company accounts and income tax. thx

  18. kotireddy gade on October 30th, 2009 9:26 am

    hai i need full information abt Trading and profit and loss a/c, and balance sheet( final A/c’s) ………plz give me full clarifying information

  19. mayur gupta on November 17th, 2009 2:21 am

    hai i need full information abt Trading and profit and loss a/c, and balance sheet( final A/c’s) ………plz give me full clarifying information and also i need profarma about all that thankns.

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