A pro forma is a term used to describe a practice or document that is provided as a courtesy or satisfies minimum requirements, conforms to a norm or doctrine, tends to be performed perfunctorily or is considered a formality. However, in finance, pro forma refers to a method of calculating financial results using certain projections or presumptions. Pro forma financial statements incorporate hypothetical numbers or estimates and are built to present the complete future economic projection of a company or person. Pro forma figures should be clearly labeled as such and the reason for any deviation from reported past figures clearly explained. Pro forma financials may not be GAAP compliant but can be issued to the public to highlight certain items for potential investors. Pro forma financial statements are often used to back up a lending or investment proposal and are issued in a standardized format that includes balance sheets, income statements, and statements of cash flow. Pro forma analyses are meant to paint a better picture of what is happening with the company, irrespective of one-time events, but considering the specific industry’s standards.