pro forma financial statement

(redirected from Pro Forma Balance Sheets)

Pro Forma Financial Statement

A financial statement that a company prepares to consider the effects of a potential activity. 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. A pro forma financial statement can be part of the risk analysis of a situation. See also: Due diligence.

pro forma financial statement

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.
References in periodicals archive ?
'The Directors of TH prepared the pro forma balance sheets solely to illustrate the impact of reporting TH's investments in equities, securities and properties at realisable asset value instead of historical costs on its balance sheets.'
EY did not perform an audit on the financial information used in compiling the pro forma balance sheets,' it said.
He reads voluminously about the new company and carefully studies the pro forma balance sheets, profit and loss statements and, especially, the spreadsheet projections.