pro forma

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Pro forma

A financial projection based on assumptions. Also, refers to a statement of income and balance sheets that exclude non-recurring items.

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

prescribing a set form or procedure. For instance, a pro forma invoice may be sent to a customer in advance of a transaction to facilitate paperwork, or a pro forma projected SOURCES AND USES OF FUNDS STATEMENT may be constructed to show the bank manager the anticipated future financial situation as a basis for negotiating a short-term LOAN.

pro forma

See pro forma statement.

References in periodicals archive ?
Explain why investors should care about the pro forma--For investors to properly evaluate pro forma measures, they have to understand its purpose, so it's important that management provide investors with a rationale for the use of these measures (i.
Provide a reconciliation--To understand the nature of the pro forma measure, it's important that investors recognize exactly how it differs from GAAP earnings.
Prepare pro forma on a consistent basis--To allow for a meaningful comparison of results over time, it's important that management determine pro forma earnings on a basis consistent with prior periods, or explain any changes in the composition of the pro forma earnings measure.