Final answer:
Non-IFRS financial measures are alternative metrics that companies use to gauge performance not defined by IFRS. Three common examples are EBITDA, FCF, and Adjusted Earnings, each offering unique insights into aspects of a company's financial health and operating efficiency.
Step-by-step explanation:
The subject of this question pertains to commonly used non-IFRS financial measures. IFRS stands for International Financial Reporting Standards, which are used globally to ensure financial statements are comparable, transparent, and consistent. Non-IFRS financial measures are alternative metrics that companies use to gauge their performance, which may not be defined or specified by the IFRS. Three such non-IFRS financial measures include:
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): This metric provides insights into a company's operational profitability by excluding the effects of financing decisions, accounting methods for depreciation and amortization and tax environments.
- Free Cash Flow (FCF): FCF measures the amount of cash generated by a business after accounting for capital expenditures. It's a useful indicator of a company's ability to finance growth, pay dividends, and execute share buybacks.
- Adjusted Earnings: This is a financial measure that excludes one-time events and non-recurring expenses, providing a clearer view of a company's recurring profitability.
Understanding these measures can provide additional context to the official financial statements and can help stakeholders make more informed decisions about the financial health and performance of a company.