A firm's pro forma financial statements are similar to its historical financial statements except that:
A) they do not include the income statement
B) they are required by the SEC in all cases
C) they look back rather than forward
D) they look forward rather than back
E) they do not include the statement of cash flows

Question

Quizplus · Accepted Answer

Pro forma financial statements project a firm's future financial performance based on expected changes in its operations, such as new investments or cost-cutting measures. Therefore, they are forward-looking and do not reflect historical results. Pro forma financial statements usually include projections of income statement, balance sheet and statement of cash flows, and are not required by the SEC in all cases.

A Firm's Pro Forma Financial Statements Are Similar to Its