The pro forma balance sheet provides a firm a sense of how its activities will affect its ability to meet its short-term liabilities and how its finances will evolve over time.

Question

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The statement is true. A pro forma balance sheet is prepared to project a company's financial position and expected future performance. It helps the firm to assess its ability to meet short-term liabilities and track how its finances will change over time.

The Pro Forma Balance Sheet Provides a Firm a Sense