What is important to understand about the label "pro forma"? Pro forma refers to GAAP-based financial statements. Pro forma requires firms to present two distinct net profit amounts in their Form 10-Ks. Pro forma relates to the amount of debt in a firm’s capital structure. Pro forma earnings or financial statements are sometimes based on a firm’s own definition which is not technically a correct definition.

Pro forma income or fiscal summaries are some of the time dependent on an association's own definition which isn't technically a right definition.  

Explanation:

Fundamentally proforma explanations are projections of the fiscal summaries like accounting report, Income proclamation and income articulation and so on which depend on presumptions like future costs, future income, speculation, financing and so forth. Subsequently it is right to state that proforma fiscal reports depend on element possess series of expectations.

Pro Forma earnings or financial statements are sometimes based on a firm's own definition which is not technically a correct definition.

Explanation:

Pro Forma  Financial Statement are based on assumptions , projections which can sometimes not be correct that is why in the answer there is "own definition" that refers to own projections and sometimes pro forma are based on previous year's information.

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