What does a pro-forma financial statement represent?

A pro-forma financial statement serves as a forecast or projection, providing a view of potential future financial performance based on certain assumptions or scenarios. These statements are typically used for planning purposes, helping businesses assess the financial implications of future decisions, such as entering a new market or launching a new product. The assumptions might include anticipated revenues, costs, and economic conditions, allowing stakeholders to gauge how different strategies could impact the company's financial health.

In contrast, other options describe different aspects of financial reporting or performance. Financial results based on actual outcomes involve historical data rather than projections, while snapshots of a company's profitability focus on current performance rather than future estimates. A summary of past financial performance also centers on historical information rather than predictions regarding future events. Thus, the defining characteristic of a pro-forma financial statement lies in its illustrative nature, projecting future scenarios rather than reporting on actual past results.