Link three financial statements modeling

Hello. Appreciate some insights.

I have a project to link three financial statements for valuation. I am wondering if I need to reconcile the historical statements’ data or I just need to link the projected data.

The problem with the historical statement is that companies adjust their previous years’ financial data here and there every year. I find it really hard to reconcile.

From a practical standard point of view, the projected financials would be most relevant for valuation.

I just wonder what is the industry standard.

Thanks.

Wayne

Linked financials are typically done only for the projections using the beginning balance sheet as a starting point. You are not investing in the historical performance of the company, only its future performance. With the beginning balance sheet and pro forma income statement assumptions in place, you should be able to derive a cash flow statement from there.

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Thanks!

Wayne