This page has been archived and commenting is disabled.

The Gap Betweeen GAAP And Non-GAAP In Two Charts

Tyler Durden's picture




 

By the magic of pure accounting gimmickry, one-off tom-foolery, non-GAAP shenanigans, and the sterling work of its now-retiring CFO; Facebook has 'managed' to produce twice as much non-GAAP net income as GAAP net income in the last 2 years...

 

Straight from the social horse's mouth, here is Facebook's Net Income on a GAAP and non-GAAP basis...

 

Which means, summed across the last 2 years, non-GAAP magic has created 100% more 'pretend' Net Income than real Net Income...

 

We are sure we do not need to tell you which one of these is used to "value" the company as "cheap"!

And yet is amazing how 'stable' Facebook has managed to keep its non-GAAP operating margins when the real GAAP margins have been so volatile...

 

But - as we told numerous times on mainstream media channels - you are not buying Facebook on valuations... you are buying growth (or the fact that there is another greater fool with no actual accounting skills willing to buy the stock $0.00001 higher than you are)...

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 04/23/2014 - 19:07 | 4688395 VD
VD's picture

fukbook

Wed, 04/23/2014 - 19:35 | 4688467 kaiserhoff
kaiserhoff's picture

There is a very simple explanation for this.

 

  Accountants favor reality.

  Economists divine chicken guts.

   Also, when someone goes tits up, the auditing firm gets sued.  Equal opportunity anyone?

Wed, 04/23/2014 - 20:55 | 4688734 KickIce
KickIce's picture

An employer has an accounting opening and has narrowed the search to two applicants.  He calls both under the pretense that he will ask each only one question: What is 2 + 2.

The first applicant answers 4 and the interviewer thanks him for his time and tells him he has performed well through the entire hiring process.

The second applicant arrives for his interview and is asked the same question.  His answer; what do you want it to be?  He is now gainfully employed.

Wed, 04/23/2014 - 19:07 | 4688396 navy62802
navy62802's picture

BUY BUY BUY!!!!!

Wed, 04/23/2014 - 19:08 | 4688399 Spungo
Spungo's picture

GAAP = reality
non-GAAP = CNBC's version of reality 

Wed, 04/23/2014 - 19:21 | 4688435 McMolotov
McMolotov's picture

Mind the GAAP.

Wed, 04/23/2014 - 19:38 | 4688487 dearth vader
dearth vader's picture

Funny, in Dutch GAAP means YAWN.

Wed, 04/23/2014 - 23:08 | 4689154 EscapingProgress
EscapingProgress's picture

Everything is a lie.

Wed, 04/23/2014 - 19:09 | 4688401 buzzsaw99
buzzsaw99's picture

the little maggot got his own jet airplane

the little maggot is a billionaire

Wed, 04/23/2014 - 19:19 | 4688431 hairball48
hairball48's picture

"...Money for nothin' and chicks for free..."

:) Love that song

Wed, 04/23/2014 - 19:25 | 4688447 Goldilocks
Goldilocks's picture

Dire Straits - Money For Nothing [subtitulado español] + lyrics
http://www.youtube.com/watch?v=fNxGr2CKLfw (5:14)

Wed, 04/23/2014 - 19:31 | 4688461 hairball48
hairball48's picture

And he was a lil "faggot" in the original recording

:)

Wed, 04/23/2014 - 19:35 | 4688481 kaiserhoff
kaiserhoff's picture

  and no doubt still is;)

Wed, 04/23/2014 - 19:47 | 4688507 sixsigma cygnus...
sixsigma cygnusatratus's picture

...and he was a millionaire in the original recording.  A million dollars doesn't go too far these days.  

Then again, MTV used to play music and was enjoyable back in those days...

Wed, 04/23/2014 - 19:11 | 4688407 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

There is no NON-GAAP result like a TESLA NON-GAAP result.

Would love to hear ZH's take on Apple's mechanizations ....to include the 7-1 split. Obviously a laser-like focus on product development. 

Wed, 04/23/2014 - 19:17 | 4688427 NDXTrader
NDXTrader's picture

I think it's pretty obvious they stuffed the hell out of the China channel. Why not, the first quarter of the deal they might as well send "extra" product. I think it was to cover up the fact that they missed the iPad # by 3 million - that's a shocking development. Also, from everything I've heard iPhone 6 might not hit until 2015. If true, then tomorrow will just be a gap to get the big boys out and unload on retail

Wed, 04/23/2014 - 19:43 | 4688512 kaiserhoff
kaiserhoff's picture

As my tax clients never learn, fucking with the inventory is a boomerang.  It returns next year to bite you in the ass.

Wed, 04/23/2014 - 19:14 | 4688416 Berspankme
Berspankme's picture

I hope Zuckerbergstein dies a horrible painful death. Nobody is more deserving than this .gov spy prick

Wed, 04/23/2014 - 19:15 | 4688417 Smegley Wanxalot
Smegley Wanxalot's picture

I give non-GAAP a big LIKE because it's like so cool & shit.

Wed, 04/23/2014 - 19:15 | 4688421 NeedleDickTheBu...
NeedleDickTheBugFucker's picture

Zuckerberg is simply borrowing from the Jack Welch-GE playbook of the 1990s.  Amazing how Welch could deliver 15% compounded EPS with zero volatility.

Wed, 04/23/2014 - 19:30 | 4688457 Chuck Knoblauch
Chuck Knoblauch's picture

I would like to see zit-boy Zuckerface manage GE!

HAHAHAHAHA!!!!!!!!!!!!!!!!!!!!!!!!!

Wed, 04/23/2014 - 19:58 | 4688439 Chuck Knoblauch
Chuck Knoblauch's picture

FB's unrealistic forecasts would make a Calvinist thief like John Perkins blush.

Confessions of an Economic Hitman, by John Perkins (a great read on crooked accounting).

 

Wed, 04/23/2014 - 19:28 | 4688452 hairball48
hairball48's picture

Maybe because of my advanced age...but I've never understood the Facebook "business model".

I realize younger generations use the internet and mobile devices far more than I do, but...What happens to Facebook if it is made essentially obsolete(or just "unpopular") by some new, as yet discovered, "technology". Technology is changing so fast these days.

And when this next financial shitstorm finally happens and the great "reset" begins--What will be the value of all these "social media" companies, including facebook? Will businesses still spend money advertising? Will the fickle public continue to use all these "social media" sites when they will struggle to buy bread?

 

Wed, 04/23/2014 - 19:57 | 4688476 Chuck Knoblauch
Chuck Knoblauch's picture

You're confused because it's not a real business.

It's an over-hyped piece of software.

Government is using it to launder dirty money through the system.

The Accounting firm auditing this Chinese laundry is going bust.

KPMG? PwC? E&Y?

It wont be Deloitte. 

I bet KPMG will be out of business in 3 years.

Wed, 04/23/2014 - 19:36 | 4688482 lasvegaspersona
lasvegaspersona's picture

hairball

you are correct...we are too old to understand all this modern non GAAP stuff...we should just die and let the new wizards ply their their magic on this bright new era. Though your heir might like thr gold you left him.

Wed, 04/23/2014 - 19:39 | 4688491 hairball48
hairball48's picture

Just die? :) Well the lil fuckers live in hope don't they? Hehe I'm spending it all!!

https://www.youtube.com/watch?v=Sx7D8p-AoEs

hairball(and Clyde the Raven)

Wed, 04/23/2014 - 20:04 | 4688559 MeelionDollerBogus
MeelionDollerBogus's picture

Facebook became obsolete to me years go for 2 key reasons.

  1. I wanted to protect my privacy
  2. I wanted to discuss fraud in finance which includes Goldman Sachs & IPOs and that included the Goldman assisted IPO of facebook so they blocked me from further posting

"Will the fickle public continue to use all these "social media" sites when they will struggle to buy bread?"

EUREKA!! I'll start a new social media site called BREADBOOK showing rich people enjoying artisan-crafted breads with a fixed footer no matter what page you're on that has a video clip of Marie Antoinette smiling and saying "Let them eat cake!"

Wed, 04/23/2014 - 19:30 | 4688455 Goldilocks
Goldilocks's picture

Kool & The Gang - Fresh
http://www.youtube.com/watch?v=sTJ1XwGDcA4 (4:00)

Wed, 04/23/2014 - 19:40 | 4688497 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

I've never seen the NASDAQ e-mini 100 juiced like this in the after hours. You'd think that the NASDAQ was only made up of APPL and nothing else. 

Wed, 04/23/2014 - 19:56 | 4688547 MeelionDollerBogus
MeelionDollerBogus's picture

ba-ZNGA!

But in all seriousness , I'm hearing nonsense like kids needing to learn math in grade 3 and the concern being that the kids can't even read, actually read, to even comprehend what the question is to even answer it . Not just one child or two but all of them in a class . What the fuck?

This is the generation that will try to learn not to be slaves, or not to be robbed by rigged markets? Really?

I don't think so . That generation is going to grow up to be Wal-Mart greeters, graduating from the Costco school of Law if their dad can pull a few strings.

Wed, 04/23/2014 - 19:48 | 4688520 MeelionDollerBogus
Wed, 04/23/2014 - 19:55 | 4688537 MeelionDollerBogus
MeelionDollerBogus's picture

...

Wed, 04/23/2014 - 20:34 | 4688662 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

I didn't realize until tonight that the entire fucking NASDAQ is AAPL. 

Thu, 04/24/2014 - 02:49 | 4689442 Bernoulli
Bernoulli's picture

Non-GAAP? What does this even mean???

Non-conforming to already lax and softened standards?

Well how about:

- My "non-traffic rules speed" was ok?

- This "non-criminal law crime" I committed was admissable?

- My "non-WADA values" of tested blood were clean?

- The "non-market price" of gold is low?

I can't handle this anymore. Probably part of the idea. Continue with the brainwashing until all the sane people stop their opposition to the system (break the resistance!) or until they go insane and freak out publicly (then we can easily declare them as crazy!).

Do NOT follow this link or you will be banned from the site!