US companies report their profits based on Generally Accepted Accounting Principles (Gaap), but are also allowed to come up with their own "adjusted" or "reported" figure.
This is the one that tends to hit the headlines as companies find a way to present their results in the best possible light. It will tend to include "EBS (Everything but Bad Stuff)", as a regulator once joked during the dotcom bubble. Absurdly contrived metrics such as "community-adjusted Ebitda" a recent gem from WeWork are common, says The Wall Street Journal's Rolfe Winkler.
All this makes a big difference to the perception of company profits. The gap between Gaap and reported earnings pershare reached $19 last year, a ten-year high.
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David Smith, The Sunday Times
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