What purpose do pro forma financial statements primarily serve?

Pro forma financial statements are primarily used to project future financial scenarios. They provide an estimation of what a company's financial performance and position might look like under certain conditions or assumptions. This type of financial statement is particularly useful for planning and forecasting, allowing companies to assess the potential impact of various business decisions, including mergers, acquisitions, or new projects.

By presenting hypothetical scenarios, pro forma statements can help stakeholders visualize outcomes based on different variables, such as revenue growth rates, expense management, and capital investments. This forward-looking perspective is essential for management teams, investors, and analysts who make strategic decisions based on anticipated future performance rather than past or current conditions.

The other choices focus on aspects of reporting that do not align with the purpose of pro forma statements. While recording actual financial performance captures historical data, measuring historical growth looks back at past performance, and complying with regulatory requirements pertains to standard financial reporting practices, none of these involvements relate to the forward-looking projections that define pro forma statements.