Question
Asked Apr 11, 2019
33 views

What are the benefits of pro forma financial statements?

check_circle

Expert Answer

Step 1

Pro forma financial statement:

Pro forma financial statements is a report which are prepared on the bases of some assumptions on an event which are occurred in past or which might occur in future.

Pro forma statement consists of preparation of projected balance sheet, projected income statement, and projected statement of cash flows.

Step 2

Benefits:

  • Pro forma statement helps the company in decisions making
  • Pro forma statement helps in financial modeling that is to calculate the financial ratios.
  • This statement is useful mainly for the external and internal users like in...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Finance

Related Finance Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: If the volatility of a stock is .33, find the standard deviation of: (see the attachment for the rem...

A: Recall the Black Scholes model derivation.Log of the stock price is normally distributed.The expecte...

question_answer

Q: Part 1 and Part II are independent. Please answer both parts. Part I: You are advising company ABC o...

A: Part I:Company ABC should choose Option #1. Because after one year Option #1 will have a present val...

question_answer

Q: What is the future value in 12 years of $1,000 payments received at the beginning of each year for t...

A: As a first step, let's gather all the information that question has to offer.Annuity investment = A ...

question_answer

Q: Today is Jan.1, 2019. Starting today you plan to invest $3000 every year, first deposit today and la...

A: Let's look at the entire problem in two parts.Part 1: Today is Jan.1, 2019. Starting today you plan ...

question_answer

Q: Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops...

A: Please see the table below. Please be guided by signs like [+] / [-] used in each row item to help y...

question_answer

Q: A ten-year bond, with par value equals $1000, pays 10% annually. If similar bonds are currently yiel...

A: Calculation of market value of bonds: Excel spreadsheet:

question_answer

Q: Divided Walls Construction (DWC) has determined that the yield to maturity (YTM) on new bonds is 5 p...

A: a)Calculation of Weighted Average Cost of Capital if new stock is not issued:

question_answer

Q: As an option trader, you are constantly looking for opportunities to make an arbitrage transaction (...

A: Part (a)Let's denote current stock price as S0, call premium as C, put premium as P, strike price as...

question_answer

Q: Most corporations pay quarterly dividends on their common stock rather than annual dividends. Barrin...

A: Part (a)D0 = $4.10; Ke = 14%; Dividend growth rate = g = 4%D1 = D0  x (1 + g) = 4.10 x (1 + 4%) = 4....