Value in 60 seconds: How to deal with "creative" accounting

13 Jun 2023 · 1 min

Watch on YouTube

1:06

David Trainer explains how Wall Street uses adjusted metrics like non-GAAP EBITDA to inflate results. Uber and other companies are rethinking these numbers. New Constructs offers a single, more reliable view of actual profitability.

Chapters

Wall Street's great. I remember early in my career when I was at Wall Street, I realized, oh, the bankers can find a ratio to make any deal look good. And when the regular accounting numbers don't work well for that, what do they come up with? Non-GAAP EBITDA, right? And by the way, the non-GAAP EBITDA, non-GAAP whatever it is, what do they tend to do? They pull out whatever they can to make the number look good. And then companies like Uber about-face and say, oh, we're not going to use non-GAAP EBITDA anymore because it actually doesn't represent cash flow or profits. Oh, really? Never realized that. Point is, that's the benefit of New Constructs is that we are going to be that one version of the truth around profitability for you so that whatever metric analysts or the marketplace is touting, We're going to let you know whether or not it's actually worth it.