Pro forma financial statements highlight situations in which actual outcomes deviate from projections,which in turn helps managers understand why a firm's results are not in alignment with its forecasts.

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Pro forma financial statements are used to project future financial performance based on assumptions and estimates. By comparing actual outcomes to these projections, managers can identify areas where their assumptions were incorrect or where unforeseen events occurred, allowing them to adjust their plans and improve their forecasting accuracy in the future.

Pro Forma Financial Statements Highlight Situations in Which Actual Outcomes