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Understanding Pro Forma Financial Statements: Forecasting Future Financial Performance
Pro forma financial statements are forward-looking reports that project a company's financial performance based on hypothetical scenarios or planned events. They are essential tools for strategic planning, budgeting, and assessing the potential impact of business decisions such as mergers, acquisitions, or new product launches. By modeling various financial outcomes, pro forma statements help stakeholders make informed decisions and anticipate future financial conditions.?
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