Earnings are basically the net fiscal advantages of the performance of a company. Earnings refers to the gross amount on which tax is payable by the company. For a thorough study of various aspects of corporate finance, several other more technical terms are also used as EBIT and EBITDA respectively. A company’s earnings represent the money it makes from its activities other than its sale of goods and services to its customers. The gross profit referred to as the income from trade in particular is included among the components of Earnings.
There are different ways of calculating earnings such as single-period end-of-quarter, end-of-day report, period wise earnings per share (EAS), period wise profit (EPS), and year-end results. Single period end-of-quarter, and period wise earnings per share refer to the monthly period end and is calculated by taking the effect of all activities during the month of that particular period. End-of-day report is generally made for the financial reporting period ending at the close of the business day of the reporting company. On the other hand, annual basis the earning per share (EPS) is calculated by taking the effect of the operations of the company in a single year. In the case of a multi-period company, all the financial reporting periods are combined to calculate the EPS.
All the financial reporting measures of the publicly traded companies are reported under the heading of Earnings. Earnings represent the monetary value received by the company from its customers or others as a result of the supply of goods or services offered. The Earnings Report portrays a basic account of all company activities and a summary of the company’s financial position.