27 February 2019

Investor publication: Analysing lessee financial statements and Non-GAAP performance measures

Free Cash Flow (FCF) is one of the most commonly used non-GAAP measures by investors in their analysis. In this Essentials publication we highlight attributes of FCF measures reported by lessees that limit comparability with FCF measures reported by companies that buy assets.

We demonstrate this incomparability through a simplified case study and offer an adjustment approach to compute comparable FCF measures that makes use of new information provided under IFRS 16 Leases. Investors may find this adjustment approach useful in making cross-company comparisons.

Issue 5 of The Essentials is available to download here. All older issues of The Essentials can be found in the resources section of the Investor Centre.

This website uses cookies. You can view which cookies are used by viewing the details in our privacy policy.