Why are pro-forma financial statements important to the financial planning process?© BrainMass Inc. brainmass.com December 15, 2020, 4:48 pm ad1c9bdddf
Pro-forma financial statements accomplish two important objectives:
Internal planning for management
Without projections of sales and expenses, a company would have no goals and no monitoring of expenses. Remember the line, "I love it when a plan comes together.' Without a plan, companies would make spur of the moment decisions with little thought to the longer range impacts to the entire company. Secondly, decisions might have a narrower impact: only to my department or ...
In a 305 word discussion, the solution subdivides the users of pro forma statements and explains the importance of those statements to each group together with examples.