The term pro forma is most often used to describe a practice or document that is provided as a courtesy or satisfies minimum requirements, conforms to a norm or doctrine, tends to be performed perfunctorily or is considered a formality.

What is meant by pro forma financial statements?

Essentially, pro forma financial statements are financial reports based on hypothetical scenarios that utilize assumptions or financial projections.

What is the purpose of a pro forma?

Pro forma, a Latin term meaning "as a matter of form," is applied to the process of presenting financial projections for a specific time period in a standardized format. Businesses use pro forma statements for decision-making in planning and control, and for external reporting to owners, investors, and creditors.