Alternative performance measures in the financial statements of industrial enterprises

In a dynamic economic environment, it is important for investors and other stakeholders to have access to relevant information about the performance of companies. Traditional financial indicators may not always adequately reveal the true efficiency and growth potential of a business, which is why alternative performance measures (APMs) are increasingly being used to provide additional insights into a company's performance. However, the use of APMs brings specific risks and challenges, including insufficient standardization and the potential for manipulation of results. Therefore, there is a growing need for more careful regulation and standardization in the use of these indicators. The aim of this master's thesis is to summarize the most important information about alternative performance measures, including their definition and regulation. The empirical part of the thesis aims to map the occurrence of alternative measures in the annual reports of industrial companies traded on the Frankfurt Stock Exchange. The resulting sample consists of 48 companies with fiscal years ending in 2023. The results of the conducted research indicate that the average number of reported alternative measures is 8. The most commonly used indicators by companies include EBIT, net debt, and EBITDA. A more detailed analysis of net debt revealed that not all companies adhere to the established rules when reporting alternative measures.