what is a pro forma financial statement 
pro forma financial statements incorporate hypothetical numbers or estimates they are built into the data to give a picture of a company s profits if certain nonrecurring items are excluded these are often intended to be preliminary or illustrative financials that do not follow standard accounting practices companies use their own discretion in calculating pro forma earnings including or excluding items depending on what they feel reflects the company s true performance or future performance as pro forma forecasts are hypothetical in nature they can deviate from actual results sometimes significantly 