Non-GAAP Earnings

AAA

DEFINITION of 'Non-GAAP Earnings'

An alternative earnings measure of the performance of a company. Many companies report non-GAAP earnings in addition to the required GAAP earnings, stating that the alternate figure more accurately reflects their company's performance. Some common examples of non-GAAP earnings measures are cash earnings, operating earnings, EBITDA and pro-forma income.

INVESTOPEDIA EXPLAINS 'Non-GAAP Earnings'

Regulation from the governing financial bodies requires that every company reports according to GAAP principles to ensure that accurate and useful information be available to all potential users. The uniformity of the information makes comparison among industry measures easier. It is important as a savvy investor to ensure that the information you are using for comparison follows the GAAP rules and is not the (often more publicized) non-GAAP earnings number.

RELATED TERMS
  1. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding ...
  2. Hierarchy Of GAAP

    An outline for determining the most appropriate sources for obtaining ...
  3. Cash Earnings Per Share - Cash ...

    A measure of financial performance that looks at the cash flow ...
  4. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
  5. Earnings Before Interest, Taxes, ...

    An indicator of a company's financial performance which is calculated ...
  6. Annual Report

    1. An annual publication that public corporations must provide ...
Related Articles
  1. Retirement

    Footnotes: Early Warning Signs For Investors

    These documents hold very important information, but reading them takes skill.
  2. Markets

    The 5 Types Of Earnings Per Share

    A look at the five varieties of EPS and what each represents can help an investor determine whether a company is a good value, or not.
  3. Markets

    How To Evaluate The Quality Of EPS

    Companies can manipulate their numbers, so you need to learn how to determine the accuracy of EPS.
  4. Options & Futures

    Core Earnings Strip Away "Creative" Accounting

    This metric is an attempt to counteract creative accounting, but it poses its own set of challenges.
  5. Investing

    How To Evaluate Pension Risk By Analyzing Annual Costs

    Learn how to assess whether a company's pension plan is posing more risks than what the footnotes indicate.
  6. Fundamental Analysis

    How do I use the PEG (price to earnings growth) ratio to determine whether a stock is overvalued?

    Using the PEG, or price/earnings to growth, ratio provides a better picture of a stock's valuation versus simply relying on the P/E ratio.
  7. Taxes

    What is the best method of calculating depreciation for tax reporting purposes?

    Learn the best method for calculating depreciation for tax reporting purposes according to generally accepted accounting principles, or GAAP.
  8. Fundamental Analysis

    Are accounts receivable used when calculating a company's debt collateral?

    Learn how accounts receivables are recorded as assets on a balance sheet; they are used when calculating a company's total debt collateral.
  9. Fundamental Analysis

    Work In Progress (WIP)

    Work in progress, also know as WIP, is an asset on the company balance sheet. WIP is the accumulated costs of unfinished goods that are currently in the manufacturing process.
  10. Fundamental Analysis

    Paid-Up Capital

    Paid-Up Capital is listed in the equity section of the balance sheet. It represents the amount of money shareholders have paid into the company by purchasing shares. It’s essentially two accounts, ...

You May Also Like

Hot Definitions
  1. Multiplier Effect

    The expansion of a country's money supply that results from banks being able to lend. The size of the multiplier effect depends ...
  2. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  3. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  4. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  5. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  6. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
Trading Center