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Another interpretation of the same data is that GAAP is so bad at representing a company's operations that both investors and firms choose to not make decisions
by abannin 10y ago
Another interpretation of the same data is that GAAP is so bad at representing a company's operations that both investors and firms choose to not make decisions off the statements. I don't know of any company who, internally, lives and dies by GAAP reporting. Sophisticated investors know this.
- mey 10y agoIs there another standard model that is better at representing the company (either from a company or investors perspective)?
- abannin 10y agoDoes there need to be one? Yes, there is IFRS.
- asmithmd1 10y agoEBITDA - earnings before interest, taxes, depreciation, and amortization - is often used for companies that don't have large pieces of equipment that wear out. http://www.investopedia.com/terms/e/ebitda.asp http://www.investopedia.com/terms/e/ebitda.asp
- frivoal 10y agoYou still need to go through GAAP (or some other ruleset) to figure out what goes into the E I T D and A of the EBITDA.