What Is Important to Understand About the Label "Pro Forma

question 30

Multiple Choice

What is important to understand about the label "pro forma"?

• A)Pro forma refers to GAAP-based financial statements.
• B)Pro forma requires firms to present two distinct net profit amounts in their Form 10-Ks.
• C)Pro forma relates to the amount of debt in a firm's capital structure.
• D)Pro forma earnings or financial statements are sometimes based on a firm's own definition which is not technically a correct definition.

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Definitions:

Collateral Agreements

Legal contracts where a borrower pledges an asset as security for a loan, which the lender can claim if the loan is not repaid.