Wall Street Prep
Interpreting Non-GAAP Reports

Interpreting Non-GAAP Reports

Learn how to interpret non-GAAP disclosures and model their impact on historical results, forecasts and valuation. Designed for investment bankers as well as equity research and credit analysts.

Why you should take this course

What You'll Learn
Types of non-GAAP items
How to deal with inconsistent non-GAAP disclosures
Non-GAAP vs non-IFRS normalizing for tax
Non-GAAP impact on forecasting techniques and valuation
Non-GAAP shares outstanding
  • GAAP-based financial statements included in company annual, interim and quarterly reports are increasingly becoming less relevant than "unofficial" non-GAAP/IFRS metrics.
  • In this course, we use real-life examples to walk through the challenges and lesser-understood nuances of accurately normalizing historical results and forecasts.
  • We discuss the mechanics and concepts required to correctly adjust operating and valuation models as well as common pitfalls associated with tax adjustments, share count adjustments and forecasting non-GAAP items in integrated financial statement models.

Who is this program for?

This course is designed for professionals and those pursing a career in the following finance careers:

  • Investment Banking
  • Buy-Side Equity Research
  • Sell-Side Equity Research
  • Private Equity
  • Credit Research
  • FP&A and Corporate Finance

Wall Street Prep’s Interpreting Non-GAAP Reports is used at top financial institutions and business schools.

Course Samples

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Non-IFRS disclosures in practice
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Normalizing for SBC, exercise II
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Forecasting EBITDA

Prerequisites

The program assumes a basic introductory knowledge of accounting (e.g. interaction of balance sheet, cash flow, and income statement) and proficiency in Excel. Students with no prior background in Accounting should enroll in the Accounting Crash Course. Students with limited experience using Excel should enroll in the Excel Crash Course.

Course Highlights

  • Taught by bankers

    Our instructors are former I-bankers who give lessons real-world context by connecting it to their experience on the desk.

  • Used on the Street

    This is the same comprehensive course our corporate clients use to prepare their analysts and associates.

  • 1.5x, 2x video speed

    Save loads of time by bumping up playback speed to breeze through lessons at your own pace.

  • Instructor Support

    Have a question on course content? Communicate directly with instructors by asking questions throughout the course.

Full Course Agenda

    Introduction To Non-GAAP Items open
    • Non-GAAP items overview
    • Why Non-GAAP?
    • What Non-GAAP disclosures look like
    • Why firms are motivated to show Non-GAAP
    • Prevalence of non-GAAP disclosures
    • Regulatory oversight of non-GAAP
    • Two broad types of non-GAAP items
    Nonrecurring Items open
    • Nonrecurring items under GAAP
    • Unusual or infrequent items under GAAP
    • Non-GAAP nonrecurring items
    • Normalizing GAAP financials
    • Normalizing GAAP financials, II
    • Non-GAAP impact on valuation
    • Too many non-recurring items?
    • Nonrecurring items disclosures in practice
    • Income statement classification
    Noncash Items — Stock Based Compensation open
    • Stock based compensation (SBC)
    • Argument for & against adding back SBC
    • Normalizing for SBC, exercise I
    • SBC disclosures in practice
    • Normalizing for SBC, exercise II
    • Amortization of capitalized SBC
    Noncash Items — Intangible Asset Amortization open
    • Noncash items overview
    • Acquired intangibles exercise
    EBITDA open
    • Introduction to EBITDA
    • EBITDA and Adjusted EBITDA exercises
    • Determining Athena's historical EBITDA
    • Forecasting EBITDA
    • ATHN bottom up EBITDA, exercise I
    • The problem with the bottom up approach
    • ATHN bottom up EBITDA exercise II
    • ATHN EBITDA solution walk through
    • Top down EBITDA forecasting
    Other Non-GAAP Topics open
    • Non-IFRS disclosures in practice
    • Non-GAAP issues in a 3-statement model
    • Non-GAAP diluted share count
    • Non-GAAP Items Conclusion
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