Pro forma Analysis is the process of estimating expected future cash flows of a project using only the relevant parts of the balance sheet and income statements.
An analytical prediction of a company's projected financial condition using operating measures, historical data, and potential cost savings from planned improvements is known as a pro forma study. Financial reviews are frequently conducted in tandem with pro forma analyses. It is used when delivering financial forecasts in a standardized style for a given time frame. Pro forma statements are used by businesses to make decisions on planning and control, as well as for external reporting to owners, investors, and creditors. Pro forma statements provide information that firms can use to plan and forecast future economic changes, analyze risks, obtain capital, and make choices about mergers and sales.
Displaying the organization's prospective earnings to creditors and possible investors. assisting management with its financial evaluation.
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