Corporate managers would like investors to believe that some losses don't matter. The analysts on Wall Street and the financial media tend to agree. Unfortunately the end result is a financial Tower of Babel, where companies, analysts and investors are often not talking about the same revenue and profit figures. Of late, companies have been playing new tricks with an old tool―"pro forma" results. Sometimes these massaged numbers are called pro forma, other times "adjusted" or "ongoing" results. But whatever they are called, the figures have become a rug under which all manner of corporate mistakes are swept. By definition pro forma earnings are supposed to show hypothetical results. Proper usage: When two companies merge, the pro forma data give shareholders a point of comparison from one year to the next. By that measure a $1 bil- lion (sales) company buying a $500 million company would not be reporting a 50% sales increase as a result. On a comparable pro forma basis, sales might be flat or down.
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