[AMERICANDREAM]

My current understanding is:

Pro-forma –> Hypothetical change of the past to see the hypothetical now. An example is “Had we bought that company 5 years ago, how would we be doing now?”

Prospective –> totally about the future. An example is “what if we buy that company this year, how will we be doing in 3 years?”

Is this correct…?

[SchruteBeet]

Yes, I believe that is correct. Pro-formas are “as if” financials – present financials to include the effect of a current transaction as if the transaction had occurred X years ago. Prospective financials are forward-looking and include your financial projections as well as financial forecasts.

[AMERICANDREAM]

@SchruteBeet Thanks. Good luck studying!

[Author]

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