Non-Gaap & True Color Non-Gaap NetROIC & ROA
Subject : Non-Gaap & True Color Non-Gaap NetROIC & ROA
.
(A)
(I)
Non-Gaap EPS
{SBC Adjusted; Diluted}
=
(Net Income + SBC × (1 - Tax Rate))
÷
Shares Outstanding {Diluted}
.
(II)
Non-Gaap NetROIC
{SBC Adjusted; Diluted}
=
100 × (Net Income + SBC × (1 - Tax Rate))
÷
(Total Equity + Total Debts)
.
(III)
Non-Gaap ROA
{SBC Adjusted; Diluted}
=
100 × (Net Income + SBC × (1 - Tax Rate))
÷
Total Assets
.
(IV)
Non-Gaap Ultimate Intrinsic Value
{EFFICIENT MARKET}
=
Non-Gaap EPS {SBC Adjusted; Diluted}
×
Non-Gaap NetROIC {SBC Adjusted; Diluted}
.
(V)
Non-Gaap Ultimate-Next Of Kin Intrinsic Value
{EFFICIENT MARKET}
=
Non-Gaap EPS {SBC Adjusted; Diluted}
×
Non-Gaap ROA {SBC Adjusted; Diluted}
.
(B)
(I)
True Color Non-Gaap NetROIC
{SBC Adjusted; Dividends + Deferred Income + Non-Productive Idle Cash Adjusted; Diluted}
=
100 × (Net Income + SBC × (1 - Tax Rate))
÷
(Total Equity + Total Debts + Dividends + Deferred Income + Non-Productive Idle Cash)
.
(II)
True Color Non-Gaap ROA
{SBC Adjusted; Dividends + Deferred Income + Non-Productive Idle Cash Adjusted; Diluted}
=
100 × (Net Income + SBC × (1 - Tax Rate))
÷
(Total Assets + Dividends + Deferred Income + Non-Productive Idle Cash)
.
Non-Productive Idle Cash
= Positive Figure {If Total Cash & Cash Equivalents - Total Liabilities = Positive Figure}
= 0 {If Total Cash & Cash Equivalents - Total Liabilities = Negative Figure}
.
(III)
True Color Non-Gaap Ultimate Intrinsic Value
{EFFICIENT MARKET}
=
Non-Gaap EPS {SBC Adjusted: Diluted}
×
True Color Non-Gaap NetROIC
{SBC Adjusted; Dividends + Deferred Income + Non-Productive Idle Cash Adjusted; Diluted}
.
(IV)
True Color Non-Gaap Ultimate-Next Of Kin Intrinsic Value
{EFFICIENT MARKET}
=
Non-Gaap EPS {SBC Adjusted; Diluted}
×
True Color Non-Gaap ROA {SBC Adjusted; Dividends + Deferred Income + Non-Productive Idle Cash Adjusted; Diluted}
.
Summary :
1. Treating cashless SBC (RSU) as an expense is a punishment to punish the donor (the company), the recipient and unfortunately also the victims (all the stakeholders). Very unwise measurement.
.
2. Gaap implementation disrupts the integrity of the financial statements and create chaos in performance evaluation and intrinsic valuation during the vesting period of the cashless SBC (RSU).
.
3. In order to maintain the integrity of financial statements, cashless SBC (RSU) should be banned.
.
4. As an alternative, cash incentive reward is proper as it does not disrupt the integrity of financial statements.