Pro Forma Financial Statements and Their Uses

Learning Journal
Author Name
Institution Affiliation
Book1 chp5
Summary:
In the chapter titled Pro Forma Financial Statement Modeling, a number of financial models have been discussed; all of them are sales-driven in a sense that they assume that both the income statements and balance sheets are related to sales (Benninga & Czaczkes, 2008). One of the most comprehensive ways to solve mathematical problems is using linear equations that help predict both the income statements and the balance sheets. In addition, the importance of pro forma has been discussed, such as it has been called the basis of credit analysis. Not only this but also a pro forma is said to be mandatory to evaluate the financial activities of a company. A good example of expenses excluded from pro forma results is a decline in the investment value of a company.
Reflecting:
Basically, this chapter discusses ...