Heard on the Street: Investors have reason to worry as creative accounting metrics from companies like Uber and WeWork have become more prevalent.
Financial accounting metrics at companies ranging from Uber Technologies to Beyond Meat to We Co. have gotten creative, going far beyond the guidelines that fall under generally accepted accounting principles.
The tech industry is among the biggest offenders and, not coincidentally, sector participants are highly unlikely to have positive net income according to normal accounting rules. Some companies tweak their top lines as well as their bottom lines. Uber, for example, uses non-GAAP “core platform revenue,” which attempts to strip out recurring costs it incurs to grow in competitive markets.
The number of companies reporting non-GAAP numbers has proliferated. In 1996, only 59% of filers used non-GAAP figures according to firm Audit Analytics. By 2017, that had grown to 97%. A gander at the wide range of valuations that non-GAAP creativity implies shows just how dangerous creative accounting can be for investors, too. Zion Research Group recently calculated Ebitda figures four different, but often used, ways for companies in the S&P 500 by sector.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Meghan, Kate, William, and Harry Team Up For Powerful Mental Health PSAMeghan Markle, Kate Middleton, Prince William, and Prince Harry team up for a powerful mental health PSA for the 'Every Mind Matters' initiative.
Read more »
Fab four reunited! Prince William, Kate, Harry and Meghan join forces once more - watch videoThe Duke and Duchess of Cambridge and the Duke and Duchess of Sussex have supported the Public Health England's new platform called Every Mind Matters...
Read more »
Meghan, Kate, William, and Harry Team Up For Powerful Mental Health PSAMeghan Markle, Kate Middleton, Prince William, and Prince Harry team up for a powerful mental health PSA for the 'Every Mind Matters' initiative.
Read more »
This Crocheting Woman Is the MVP of SportsThis is how to “watch” a football game, or any game for that matter.
Read more »
My Favorite Pencil Never Smudges and Looks Like Black Velvet on a Page'I write a lot in transit, and when I use [these pencils], my to-do lists remain pristine through every bump and jostle'
Read more »
A judge finds there is nothing wrong with Harvard admissionsA court case reveals the preferential treatment given to white and wealthy 'legacy' applicants to Harvard
Read more »