Definition of Pro forma:
Pro forma, a Latin term that means “for the sake of form” or “as a matter of form”, refers to a method of calculating financial results using certain projections or presumptions.
The presumptions about hypothetical conditions that occurred in the past and / or may occur in the future are used to project the most likely outcome for corporate results in reports known as pro forma financial statements. For example, a budget is a variation of a pro forma financial statement as it anticipates, based on certain assumptions, the inflow of projected revenues and the outflow of funds for a defined future period, usually a fiscal year.
Done or produced as a matter of form.
Assumed, forecasted, or informal information presented in advance of the actual or formal information. 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. Pro forma financial statements give an idea of how the actual statement will look if the underlying assumptions hold true. Latin for, according to form or for forms sake.
A standard document, form or financial statement.
As a matter of form or politeness.
How to use Pro forma in a sentence?
- The pro forma statements generated by the financial analysis team were presented to the CFO who used them in his report.
- Sometimes you may get something in pro forma so that you can be prepared for the time when everyone finds out.
- Pro forma, a Latin term that means “for the sake of form” or “as a matter of form”, refers to a method of calculating financial results using certain projections or presumptions.
- If you want to be fully prepared for a big meeting or negotiation you should try to have all the info you can pro forma .
- The SEC has stated that it is illegal, and punishable by law, for publicly traded companies to mislead investors with pro forma financial results that do not use the most conservative possible estimates of revenue and expense.
- Please return the enclosed pro forma.
- Pro forma financials may not be GAAP compliant but can be issued to the public to highlight certain items for potential investors, or they can be used internally by management for business decisions.
Meaning of Pro forma & Pro forma Definition