Showing posts with label pro forma figures. Show all posts
Showing posts with label pro forma figures. Show all posts

Monday 12 January 2009

Avoid Pro Forma financial figures

Avoid Pro forma financial figures
Pro forma financial figures are unreliable for a valuation exercise

Value investing eschews pro forma financial figures.

These are pictures of performance based on making various assumptions other than those applied in preparing actual financial statements.

While useful for certain exercises such as depicting how a newly merged company would have looked if the merger had occurred some years earlier, they do not represent useful valuation resources in other contexts.

Pro forma figures are the least reliable data in financial reporting and are invariably unreliable for a valuation exercise.


Also read:
  1. Income Statement Value: The Earnings Payoff
  2. Adjustments in Current Earnings figure
  3. Avoid Pro Forma financial figures
  4. Avoid Extrapolated Future Earnings Growth figures
  5. Estimating Growth in Value Investing
  6. Franchise Value
  7. GROWTH'S VALUE
  8. GROWTH'S VALUE (illustrations)