Gaap revenue vs cash revenue and what to use

Can someone tell me how id go about calculating cash vs gaap revenue for a saas business? Why is there a need to look at cash revenue? Shouldnt you always value off gaap revenue?

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Comments (5)

Jun 6, 2021 - 5:44am

This may be too simplistic but the situation that comes to mind is a customer paying for a subscription 12 months in advance. Ignoring any discount for paying 12 months upfront, if the company is only half way through its fiscal year then only 50% of revenue would be recognized but the full cash amount has been received.

  • Analyst 1 in IB - Gen
Jun 8, 2021 - 8:33am

Hi yes, this makes sense conceptually and helpful. I am more wondering if there is ever a need to model out cash revenue and if so when?

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