Question

pro forma financial statements are
a. the most comprehensive means of financial forecasting
b. often required by prospective creditors

Thank you for using the Jiskha Homework Help Forum. Here is a definition of Pro Forma Financial Statements: Definition
Financial statements as adjusted to reflect a projected or planned transaction.

A Latin term meaning "for the sake of form". In the investing world, it describes a method of calculating financial results in order to emphasize either current or projected figures.

Pro forma financial statements could be designed to reflect a proposed change, such as a merger or acquisition, or to emphasize certain figures when a company issues an earnings announcement to the public.

Investors should heed caution when reading a company's pro-forma financial statements, as the figures may not comply with generally accepted accounting principles (GAAP). In some cases, the pro-forma figures may differ greatly from the those derived from GAAP.