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Pro forma

Pro forma

What is a Pro forma?

A pro forma refers to financial statements that rely on assumptions to project out future financial health. Based on perceived risk, a property investor may decide to havea pro forma that reflects lower than expected appreciation rates.

Property investors working with limited partners may choose to create pro forma financial statements to project out expectations for the investment. The Balance Sheet, the Income Statement, and the Statement of Cash Flows are commonly prepared as pro forma financial statements.

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