![]() ![]() This five-year pro forma eases any doubts. Of course, experienced buyers and private equity firms will check over your historical growth and the healthiness of your current financials, as this demonstrates the success of your business.īut your company’s new owners can’t travel back in time, so they need reassurance that their acquisition is profitable in the future. This is essential, because when a buyer assesses your company as a potential investment opportunity, they are analyzing your company’s future, not the past. Put simply, a pro-forma estimates your business’s future revenue and overall finances. Pro forma statements, therefore, in summary, indicate the projected status of a company in the future based on current financial statements." These models forecast the anticipated result of the transaction, with emphasis placed most specifically on estimated net revenues, cash flows and taxes. "In a business sense, financial statements prepared with the pro forma method are made ready ahead of a planned transaction such as an acquisition, merger, change in capital structure or a new capital investment. ![]() What does this mean? Here is the Investopedia definition of ‘pro forma”: But, this is just one step in establishing your true business valuation – once recasting is done, it is time to think about your five-year pro-forma. This means you won’t get the optimal return on investment for your business or attract the attention from buyers your company deserves. ![]() Without this important process, you risk underselling the value of your biggest asset before you exit. However, the National Journal argued that much of the work of members of Congress takes place off the floor.One of our most recent insights placed a spotlight on recasting your business’s financials, the key first step in how to value a company. At any rate, the current Congress hasn’t repealed any laws either (despite dozens of votes to repeal or defund the Affordable Care Act).Įarlier this month, The New York Times calculated that the House had been in session a total of 942 hours in 2013 (not counting brief pro-forma sessions) - “the fewest hours in a nonelection year since 2005, when detailed information about legislative activity became available.” By contrast, according to the Times, the House was in session 1,200 hours in 2011, 1,350 hours in 2005 and nearly 1,700 hours in 2007. Of course, there are other ways to measure Congress’ job performance. House Speaker John Boehner has said that Congress “should not be judged on how many new laws we create, we ought to be judged on how many laws that we repeal,” though it bears noting that that would require passing a repeal measure, which itself would count as substantive legislation by our definition. Overall, the current Congress has enacted only 65 laws, according to the Library of Congress’ THOMAS website and the White House’s log of signed legislation. ![]() However, as of today (and after extending our analysis back to the 104th Congress of 1995-96), the 113th has passed fewer substantive measures than any Congress in two decades - just 55 laws, versus 63 in 2011 (the first year of the 112th Congress, itself one of the least productive in recent history). (We deliberately chose an expansive definition of “substantive,” excluding only purely ceremonial legislation such as post-office renamings and commemorative-coin authorizations.) At that time, we concluded that while the current Congress was “on track to be one of the least productive,” it hadn’t quite made it there yet. We first did this back in September, when we examined how many substantive laws had been enacted by that point in the year and compared the current Congress to the previous seven. Now that the first session of the 113th Congress has passed into history, it seems appropriate to take another look at its productivity, or lack thereof. Updated data on the legislative productivity of the 113th Congress is available here. ![]()
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