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To: bcrafty who wrote (29967)	2/1/2002 8:54:24 AM
From: john722	Read Replies (1) of 209892

Interesting Number Crunches I Don't know if the following is accurate (borrowed post from another thread), but it sure makes a good point about pro-forma vs. GAAP P/E's on the Naz 100: ---------------------------------------------------------- <SEC is going to have no choice, but to either get rid of proforma accounting or place some significant rules on it's use. What a scam. 75% of the NASDAQ 100 reported better profits on a pro forma basis than on a GAAP basis. The average favorable difference per company for these 75 companies was $1.6 billion. The companies that used pro forma adjustments to improve earnings had a combined $87.7 billion in GAAP losses before pro forma adjustments turned them into profits. The 25 companies that did not make favorable pro forma adjustments had a combined GAAP profit of $5.5 billion. A full year 2001 PE ratio for the NASDAQ 100 based on real earnings is meaningless as earnings for the first three quarters are a negative $82 billion and full year results are certain to be negative. However, a PE can be calculated on the pro forma numbers. We took the three quarters "actual" pro forma results ($19.1 billion profit) and added in fourth quarter estimates from First Call to come up with projected full year 2001 pro forma earnings of $25.2 billion for the NASDAQ 100. Based on the one hundred companies' combined market capitalization on January 5, 2002, this yielded a pro forma PE ratio of 75 time earnings. On that date, the companies that had lost a combined $82 billion (on a GAAP basis) had a total market capitalization of $1.9 trillion. Even based on questionable pro forma earnings, the NASDAQ 100's PE ratio is lofty>. -----------------------------------------------------------

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