Pro Forma Financial Statements

Definition

Hypothetical financial statements based on assumptions about the future—basically, a financial fairy tale presented as a business case.

Example Usage

The pro forma financials projected 50% growth, but we all knew that was optimistic given the actual market conditions.

Origin

Latin term meaning 'as a matter of form'; common in investment banking since the 1980s

Fun Fact

Pro forma statements are often wildly inaccurate, which is why experienced investors always adjust assumptions.

Source: Financial forecasting and investment analysis

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