Pro Forma
Definition
Pro Forma: Pro forma financials are projected or hypothetical financial statements showing expected future performance or the effect of proposed transactions. Used in fundraising, M&A, and planning, pro forma statements help stakeholders understand future financial impact. They're always based on assumptions that should be clearly stated.
Example Usage
“We showed pro forma financials assuming the acquisition closes. The combined entity reaches profitability 18 months earlier than standalone.”
Common Misconceptions
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