Module V· Pro-Forma Combined FinancialsAdvanced
Question

How do you model the pro-forma cash flow statement after acquisition?

Answer

Begin with combined net income, adjust for D&A, amortization, PPA non-cash items, deferred taxes, working capital, and integration cash costs. Investing cash flow includes purchase price, capex, and any asset sales. Financing cash flow includes new debt, debt repayment, equity issuance, dividends, and financing fees. Reconcile ending cash to the pro-forma balance sheet.