Non-GAAP Metrics

Definition

Financial metrics that don't follow Generally Accepted Accounting Principles, letting companies show themselves in a more flattering light. Essentially, 'profits, but with our creative accounting.'

Example Usage

Our 'adjusted EBITDA' (which excludes stock options, one-time items, and our CEO's personal wine collection) was $15 million.

Origin

Popularized in the 2000s as companies looked for ways to beat earnings estimates

Fun Fact

The SEC requires companies to reconcile non-GAAP metrics back to GAAP, so everyone can see exactly how much prettier the spin is.

Source: Corporate financial reporting

Related Terms

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top-down analysis

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Intermediate

stimulus

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Advanced

bargain purchase

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Fiduciary

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Advanced

Carry-Forward

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Intermediate

deterioration

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💰 Finance / Accounting

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