Adjusted GPA on a Pro Forma Basis

by Sir Equity Go

Recently, recruiters at top universities and college administrators alike have recognized a growing trend in the student job market, namely the adoption of “adjusted” GPA figures. It appears that students have realized what investment bankers have known for years: if you don’t like a number, you can change it.

Say you are an investment banker at a large Wall Street Firm, like Silverman Sachs or Layman Brothers, and you are trying to syndicate Theoretical FCF Corp’s bonds. The problem is that Theoretical FCF Corp seems to lack any actual cash flow and will almost certainly never actually pay down any debt. What do you do? Just pro forma their EBITDA to what their cash flow would be if they actually generated cash flow, as you kinda expect they may sometime in the future. And if that doesn’t get your bond customers to a number that makes them want to write big tickets, adjust that number for “one-time” expenses like “bad debt”, “restructuring charges” or the vague but powerful “fees”. This is how you get it done when syndicating debt or selling IPOs.

Now for a student, their GPA is basically the equivalent of a firm’s 4 year trailing cash flows. The number itself carries huge weight in job interviews, yet for decades students have reported GPA exactly as it appears on their transcript. While entirely accurate, this is a huge mistake. Job applicants are now realizing that adjusting their GPAs can give a more accurate misrepresentation of their performance and expected future production.

Why should an employer hire an average of you over the last four years, when what they should be interested is a real misrepresentation of what you could be now if not for certain events? Here are some ways students are making themselves look better on paper:

  1. Add-Backs for non-recurring GPA deductions, such as getting drunk at a final, or anything that happened freshman year
  2. Pro forma GPA for dating someone smart or at least someone who wears glasses in the morning.
  3. Projected GPA levels for future years using the same class load. Surely a student would be more efficient in those classes if the student took them again. Thus the student should adjust their GPA to better match their future production.
  4. And the most common move, arbitrarily making their GPA a 3.6 – good enough to get by, but not good enough to raise suspicion.

Recommendation: If you are serious about a job in finance, it’s important to signal that “you get it” before you even arrive. We heartily endorse the use of adjusted and PF GPAs for this reason. Remember, it’s not what you did or will do, but what you can convince people you did or will do.

Related Reseach:

Ad Sense Ad Sense


  1. MCE
    February 12th, 2007 | 2:54 pm

    The Major GPA is completely analogous to using the most profitable business segment as a representation for the entire company.

  2. February 12th, 2007 | 2:59 pm

    The major GPA is a great move. We support it.

  3. The Corner
    February 12th, 2007 | 3:55 pm

    Mr. Juggles, is there any legal risk of non-compliance with Reg FD in this strategy?

  4. February 12th, 2007 | 4:06 pm

    Yes. And no. Nyes?

  5. MGW
    February 12th, 2007 | 5:13 pm

    Perhaps using trendline projections for GPA will catch on.
    Freshman: 2.9
    Sophomore: 3.2
    Junior: 3.5
    Senior: 3.8

    So current year (the one you put on your resume of course) would be 4.1?

  6. February 12th, 2007 | 5:16 pm

    Seems appropriate to me. Of course, so do GIANT ads. This is the largest ad I could find. Hopefully it works as well as our Giant Comment strategy did.

  7. bfellows
    February 12th, 2007 | 7:29 pm

    What about adjusted GPA accounting for other schools? Say a student earned a 3.9 at the Institute of Safari Planet. Can they adjust for excessive management compensation and arrive at an adjusted GPA of 3.45 at Chicago?

  8. bfellows
    February 12th, 2007 | 7:48 pm

    Although, it may work better the other way around. A student from Chicago could say they had an Institute of Safari Planet equivalent of 3.9 despite their transcript’s claim to 3.45. I hear this is common among law students and it may be a new “interdisciplinary” approach.

  9. TheUnrepentantGunner
    February 13th, 2007 | 9:55 pm

    lets not kid ourselves here

    “A” students become professors
    “B” students become middle managers
    “D” students and dropouts become billionaires

    Clearly its all about the positioning of the gpa.

    ….Mr 2.9

  10. Cincinnatus_C
    February 14th, 2007 | 9:10 am

    the funny thing is that i used this approach during a job interview in detroit of all places. the interviewer asked me to turn over my college transcript, and as i slid it across the table and his fingers touched the envelope, i clamped my hand down and said “wait! before you open . . ” and explained that he should really look at my GPA as a time-weighted GPA due to stronger recent two years’ performance, and non-recurring weak performance during the prior two years (actually more than two, but whatever..i took my time in getting to the real world…i knew it would always be there)

  11. October 21st, 2008 | 2:20 pm

    Good for people to know.