adiggs
Well-Known Member
For a fast growing company, I tend to think the non-GAAP numbers are a better representation of the business; GAAP numbers tend to be a better long term view into a company that is more stable (probably positioned in a more stable market too).
The real answer gets into accounting, and I believe that every investor needs to have at least a basic understanding of accounting principles. Stuff like double entry bookkeeping, debits / credits, expense / capital, and reading financial statements (income statement, balance sheet, cash flow statement) as well as understanding how these are different and why they are essential and complementary for understanding a business.
I also believe there are any number of online primer / education sources for this sort of education, and I expect they'll run between 2 and 8 hours (it's not hard, but it's not trivial). And I've probably freaked out a few accountants along the way (note - I'm not an accountant, nor do I work in anything resembling that field).
For myself, with such a long term view of the company, any particular quarterly financial numbers are largely irrelevant. To the degree I notice, I care that top line revenue is heading the right direction, and that bottom line income (whether GAAP or non-GAAP) is heading in the right direction. The bottom line should be increasing faster than the top line (more efficient use of capital as factories go from partial capacity to full capacity).
And I tend to focus more on year over year results vs. quarter over quarter. The year over year does a better job of accounting for the seasonality that is common to many businesses, including auto.
