Wall Street Prep – Interpreting Non-GAAP Reports

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

Why you should take this course?

• GAAP-based financial statements are increasingly becoming less relevant than “unofficial” non-GAAP/IFRS metrics.
• Here, we 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 financial models.

What will you learn in Interpreting Non-GAAP Reports?

Chapter 1: Introduction to non-GAAP items

1. Non-GAAP course welcome
2. Course Downloads
3. Non-GAAP items overview
4. Why Non-GAAP?
5. What Non-GAAP disclosures look like
6. Why firms are motivated to show Non-GAAP
7. Prevalence of non-GAAP disclosures
8. Regulatory oversight of non-GAAP
9. Two broad types of non-GAAP items

Chapter 2: Nonrecurring items

10. Nonrecurring items under GAAP
11. Unusual or infrequent items under GAAP
12. Non-GAAP nonrecurring items
13. Normalizing GAAP financials
14. Normalizing GAAP financials, II
15. Non-GAAP impact on valuation
16. Too many non-recurring items?
17. Nonrecurring items disclosures in practice
18. Income statement classification

Chapter 3: Noncash items — Stock based compensation

19. Introduction to non-cash items
20. Argument for & against adding back SBC
21. Stock based compensation (SBC) review
22. Normalizing for SBC, exercise I
23. SBC disclosures in practice
24. Normalizing for SBC, exercise II
25. Amortization of capitalized SBC

Chapter 4: Noncash items — Intangible asset amortization

26. Noncash items overview
27. Acquired intangibles exercise

Chapter 5: Historical EBITDA

28. Introduction to EBITDA
29. EBITDA and Adjusted EBITDA exercises
30. Determining Athena’s historical EBITDA

Chapter 6: Forecasting EBITDA

31. Forecasting EBITDA
32. ATHN bottom up EBITDA, exercise I
33. The problem with the bottom up approach
34. ATHN bottom up EBITDA exercise II
35. ATHN EBITDA solution walk through
36. Top down EBITDA forecasting

Chapter 7: Other non-GAAP topics

37. Non-IFRS disclosures in practice
38. Non-GAAP issues in a 3-statement model
39. Non-GAAP diluted share count
40. Non-GAAP Items Conclusion

Who is this course 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

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.

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