What Is Earnings?
Earnings are basically the positive side of the equation of a company’s operation. Earnings per share (EPS) is the measure on which corporate profit is calculated. Several other terms are also used such as EBIT and EBITDA for a detailed analysis of different aspects of company operations. Some people might not be familiar with these terms but the basic meaning is that they are profits before tax and includes the taxes for disposing your shares in the stock market.
There are many ways by which earnings can be calculated, one of them being the total revenues earned during a period of time. It could also be calculated by dividing the gross revenues by the number of hours the employees worked and dividing the wages paid to them by the number of working hours they have been working. Another method is to divide the gross revenues by the number of hours the customers have spent using a particular product. Earnings per employee is another popular way of calculating earnings because it takes into account the salaries paid to the employees and other expenses incurred by the company.
A company’s profit and loss statement is a statement that details all company-wide income including those of its customers. A company’s income statement will be presented at the end of the year for publishing. Other important parts of the earnings include the following: Professional impairment (purchasing and selling of impairment charges less selling expenses, less administrative expenses), Interest and other revenue items, Deficit income, Interest income and Earnings before tax (EAT). These are just some of the many different measures used to calculate the Earnings ratio.