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    Pro-forma financial statements and financial planning

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    Why are pro-forma financial statements important to the financial planning process?

    © BrainMass Inc. brainmass.com December 15, 2020, 4:48 pm ad1c9bdddf

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    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 ...

    Solution Summary

    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.