Effects of Latest Non-GAAP Guidance? Too Early to Tell

It is clear that the communication of non-GAAP financial measures will likely continue to be a core part of the fabric of company reporting. Yet the widespread supply of and demand for these metrics should not mask the many lingering concerns associated with them or downplay the need for robust o...

By Vincent Papa • May 19, 2017

SEC’s Non-GAAP Guidance Should Be Withdrawn

Let’s say an analyst who is reporting on a computer retailer wants to calculate a basic turnover ratio: sales/average inventory. Typically, the analyst must utilize sales and inventory amounts from company financial statements to calculate this ratio. But the numerator, sales, presents a major pr...

By Charles Lundelius • May 19, 2017

Explore the Trendline➔

Tax policy shifts: What CFOs need to know to stay ahead

Discover how evolving tax policies are creating new opportunities and challenges for CFOs.

By CFO.com staff

Alibaba Posts Biggest Sales Increase Since IPO

Alibaba reported record sales growth for the fourth quarter but its earnings missed estimates and the businesses outside its e-commerce core failed to turn a profit.Alibaba’s sales rose about 60% to 38.58 billion yuan ($5.60 billion) in the quarter ended March 31, the biggest quarterly increase s...

By Matthew Heller • May 19, 2017

Square-Off: Are the SEC’s Non-GAAP Rules Too Strict?

Few would argue that public companies shouldn’t be allowed to present any performance metrics not provided for in generally accepted accounting principles (GAAP). Just as few would argue that public companies should have free reign to report any numbers they choose in any manner they choose.But t...

By David McCann • May 18, 2017

Ralph Lauren Same-Store Sales Drop 12%

Ralph Lauren’s shares fell to levels not seen since the recession after the apparel chain reported a larger-than-expected decline in same-store sales.For the fourth quarter, comparable sales fell 12% drop in comparable sales, easily missing analysts’ expectations of a 6.5% drop and contributing t...

By Matthew Heller • May 18, 2017

Non-GAAP Metrics Are a Response to Faulty Reporting Standards

It’s not SEC rules being too strict that is the issue. Rather, it’s the variance in interpretation, guidance, and enforcement of publicly reported non-GAAP measures.Kris Hutton The debate over global financial reporting standards is nothing new and is regularly a hot topic among accounting pundit...

By Kris Hutton • May 18, 2017

Non-GAAP Rules Are Needed to Keep Companies Honest

Companies present non-GAAP financial measures for various reasons. At times, the intent is to overshadow an entity’s results of operations, especially if it doesn’t meet market expectations or isn’t yet profitable.Indeed, non-GAAP financial measures often present a rosier picture of an entity tha...

By Jennifer Biundo • May 18, 2017

Target Boosts Profit But Same-Store Sales Fall

Target reported increased profit that beat analysts’ estimates but another decline in same-store sales indicated the difficulty in stemming the shift to online shopping.The retailer’s net income rose to $681 million, or $1.23 a share, in the first quarter, from $632 million, or $1.05 a share a ye...

By Matthew Heller • May 18, 2017

‘Wannacry’ Spotlights Need for Cyber Liability Coverage

Proof that cyber threats are trending worse, not better, was on hand starting last week, when a massive global ransomware attack infected computer systems in over 150 countries. The aptly named “wannacry” malware was unleashed on business and governmental sectors across the globe.  While there’s ...

By Joshua Gold • May 17, 2017

Do Companies Adjust Revenue in Response to Investor Behavior?

A new study offers fresh evidence that companies may manipulate their financial results in response to investor behavior.The American Accounting Association research, which studied 6,836 public companies over a period of more than 16 years, measured the market’s sensitivity to quarterly revenue a...

By David McCann • May 17, 2017

Retailer Rue21 Takes Road to Bankruptcy

Rue21 has become the latest retailer to file for bankruptcy protection, citing changing fashion tastes and the “significant headwinds” facing the industry.The Pittsburgh-based fashion and accessories retailer had already begun closing nearly 400 of its 1,179 stores before it filed a Chapter 11 pe...

By Matthew Heller • May 16, 2017

TJX Same-Store Sales Growth Slows to 1%

TJX Companies missed revenue estimates and its same-store sales grew at the slowest rate in two years, raising fears that the retail doldrums have spread to the off-price segment.The parent of T.J. Maxx, Marshalls and HomeGoods said Tuesday that profit rose 8% to $536.3 million or 82 cents per sh...

By Matthew Heller • May 16, 2017

Metric of the Month: Transaction Processing

For years, CFOs have talked about the importance of moving finance out of the transaction-processing business and toward a more strategic role.Obviously, the transaction work still has to get done. But nothing wastes intellectual talent like an army of accountants spending most of their time open...

By Mary Driscoll • May 15, 2017

Former SEC Chief Thinks Commission Could Boost Climate Focus

Former Securities and Exchange Commission chief Mary Schapiro thinks the SEC could be doing more to push companies to disclose their climate change risks.Mary Schapiro Following the release of the SEC’s 2010 interpretive guidance on climate change disclosures, the commission “aggressively comment...

By David Katz • May 12, 2017

Macy’s Comp Sales Fall for 9th Straight Quarter

Macy’s shares plunged after the struggling retailer reported a larger-than-expected decline in same-store sales as well as a 39% drop in quarterly profit.Macy’s said Thursday that overall revenue fell 7.5% to $5.34 billion in the first quarter, in part due to store closings, while sales at stores...

By Matthew Heller • May 12, 2017

PCAOB Trying Different Tack in Selecting Audits

While there’s no evidence that audit firms can predict which audits the Public Accounting Oversight Board will choose to inspect, the PCAOB is taking steps that will limit the chance that a firm could manage to the risk of the inspection process.In remarks before the annual Baruch College Financi...

By Vincent Ryan • May 10, 2017

Ex-SEC Employee Accused of Improper Trading

A former U.S. Securities and Exchange Commission employee has been charged with making improper trades in options and other securities and concealing his trading from the SEC’s ethics office.SEC employees are subject to strict rules designed to prevent even the appearance that they may use their ...

By Matthew Heller • May 10, 2017

What Kind of Value Generator is Your Company?

I’ve been working in software now for more than 15 years, and one of the most common questions I’ve heard is, “How do these privately held software companies achieve ridiculously high valuations when they are losing massive amounts of money?” These companies are often dubbed “unicorns” because, l...

By Ken Stillwell • May 9, 2017

Berkshire Hathaway Profit Falls 5% to $3.56B

Berkshire Hathaway’s operating profit from its businesses fell 4.8% in the first quarter as its insurance subsidiaries swung to an underwriting loss, offsetting gains by its railroad and utilities.Warren Buffett’s conglomerate had operating earnings of $3.56 billion, or $2,163 per Class A share, ...

By Matthew Heller • May 8, 2017

Do We Remember How to Grow?

In 2016, S&P 500 companies returned $877 billion to shareholders as dividends and net share buybacks. Distributions to shareholders increased by nearly 30% from 2007 levels — but, unfortunately, such distributions also represented 90% of these companies’ net income for the year.Frank R. Hopso...

By Frank R. Hopson • May 8, 2017

The Great Wealth Transfer is Here … Now What?

This year, the oldest members of the Baby Boom generation crossed a crucial threshold. They turned 70.5 years-old. Why does that matter? U.S. law currently requires anyone 70.5 or older to begin annual withdrawals from their tax-sheltered retirement accounts and pay taxes on those distributions.I...

By Brian Peccarelli • May 8, 2017

Revlon Shares Fall 23% on Swing to Q1 Loss

Revlon shares tumbled to their lowest level since 2013 after the makeup company reported it swung to a loss in the first quarter amid the tough environment for malls and department stores in the U.S.Revlon’s net loss was $37.4 million, or 71 cents per share, compared with income of $11.0 million,...

By Matthew Heller • May 5, 2017

SEC’s Chief Accountant: Issuers Must Address ‘Other Reporting’ Risks

When the Securities and Exchange Commission released staff guidance a year ago about reporting non-GAAP financial measures, issuers were advised to review disclosure controls and procedures to ensure they adequately addressed the use and presentation of non-GAAP financial measures.Now, with issue...

By Vincent Ryan • May 5, 2017

iHeartMedia Issues ‘Going Concern’ Warning

The parent company of iHeartRadio has warned it may not be able to continue as a going concern as it continues to struggle with the $20 billion debt burden from a 2008 leveraged buyout.Private-equity firms Bain Capital and Thomas H. Lee Partners were the lead investors in the $24 billion buyout o...

By Matthew Heller • May 4, 2017

Groupon Shares Drop 13% on Big Sales Miss

Groupon reported a big miss on first-quarter revenue, sending its shares down sharply, but the e-commerce marketplace said its strategy of focusing on profitability is on track.Groupon’s revenue of $673.6 million for the quarter was down about 4% on a year ago and well below analysts’ estimates o...

By Matthew Heller • May 4, 2017