The purpose of pro-forma financial statements is so that cash is never left short and a financial outlook of the firm is created and analyzed.

Question

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Pro-forma financial statements are prepared to forecast future financial performance and to ensure that adequate cash flow is available for the business. These statements are used to estimate the financial requirements and profitability of the company, which helps the management to take better financial decisions.

The Purpose of Pro-Forma Financial Statements Is So That Cash