By necessity, building pro forma financial statements requires that managers make many assumptions which will not turn out to be true. Therefore, pro forma financial statements are of little use as a financial management tool.

a. True
b. False

False, the pro forma is a financial record or statement prepare by the company in order to reduce the risk. It includes or shows the impact of changes in the company. Moreover, pro forma is also considered as the set of assumptions due to which investors and entrepreneurs forecast the company’s situation in the future. Therefore, it can be said the pro forma provides the approximation of business performance that is based on assumptions.

By necessity, building pro forma financial statements requires that managers make many assumptions which will not turn out to be true. Therefore, pro forma financial statements are of little use as a financial management tool. a. True b. False

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By necessity, building pro forma financial statements requires that managers make many assumptions which will not turn out to be true. Therefore, pro forma financial statements are of little use as a financial management tool.

a. True
b. False