Non-GAAP

Non-GAAP

Describing a calculation of income or earnings not made according to Generally Accepted Accounting Principles. It is often difficult to compare non-GAAP earnings to each other because there are no standardized methods for computing them. Examples of non-GAAP earnings include free cash flow and core earnings.

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Non-GAAP. Computations used to report corporate income and earnings that are not defined by generally accepted accounting principles (GAAP) are described as non-GAAP metrics.

These measures, including core earnings, free cash flow, pro forma earnings, operating earnings, and earnings before interest, taxes, depreciation, and amortization (EBITDA), provide useful financial information about individual companies.

But lack of standardization in these calculations, plus the potential for creative accounting, make it difficult to draw relevant comparisons among companies or draw meaningful conclusions from these statistics.