Module V· Pro-Forma Combined FinancialsBasic

Question

What is a pro-forma combined balance sheet, and what three components are merged?

Answer

A pro-forma combined balance sheet shows what the combined company would look like at closing after the transaction. It merges buyer standalone balance sheet, target standalone balance sheet, and transaction adjustments. Transaction adjustments include financing, cash paid, refinancing, fees, PPA step-ups, deferred taxes, goodwill, NCI, and elimination of target equity / buyer investment.

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