GENERAL KNOWLEDGE

Detailed explanation-1: -105), a pro forma financial statement is defined as “a financial statement prepared on the basis of some assumed events and transactions that have not yet occurred.” Historical financial statements are used to measure an organization’s past financial performance and condition.

Detailed explanation-2: –Historical financial statements are to review areas that your business didn’t do well in the past or how to improve in the future, while pro forma financial statements will help determine if you should start a business.

Detailed explanation-3: -Historical pro forma financials provide a backward-looking projection of a company’s results in one or more prior years that includes the results of another business that the company wants to purchase, net of acquisition costs and synergies.

Detailed explanation-4: -Pro forma financial statements are projections of future expenses and revenues, based on a company’s past experience and future plans.