Question

Pro forma financial information:

A) usually focsuses on pro forma earnings, usually on a non-GAAP basis

b) is always presented on a generally accepted accounting principles (GAAP) basis

c)is illegal

d) is found in the statement of stockholders' equity

Mandalay had cash flow from operations (in millions) of $358, cash flows from investments of -$160, cash flows from financing of -$198, and net income of $53. Mandalay had free cash flow of:

a) $198

b) $160

c) $251

d)$0

Answer 1

Correct statement is A

Pro-forma income portray a money related statement that has theoretical sums, or gauges, incorporated with the information to give a "photo" of an organization's profits if certain nonrecurring things were avoided. Pro-forma profit are not figured utilizing standard GAAP and as a rule forget one-time costs that are not some portion of typical organization tasks, for example, rebuilding costs following a merger. Such a cost can be legitimately seen as a one-time thing that does not add to the organization's illustrative valuation.

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Free cash flow = cash flow from operation – cash flow from investment

                           = 358 – 160 = 198

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