The purpose of adjusting the target's income statement is to provide an accurate estimate of the
current year's reported operating income or operating cash flow.

Question

Quizplus · Accepted Answer

Adjusting the target's income statement helps to account for any potential discrepancies or one-time events that may affect the accuracy of the reported operating income or operating cash flow for the current year. By providing a more accurate estimate, acquirers can better evaluate the financial health and potential of the target company.

The Purpose of Adjusting the Target's Income Statement Is to Provide