Surf Wiki
Save to docs
general/business-terms

From Surf Wiki (app.surf) — the open knowledge base

Earnings

Financial term

Summary

Financial term

Earnings are the net benefits of a corporation's operation. Earnings are also the amount on which corporate tax is due. For an analysis of specific aspects of corporate operations several more specific terms are used as EBIT (earnings before interest and taxes) and EBITDA (earnings before interest, taxes, depreciation, and amortization).

Many alternative terms for earnings are commonly used, such as income and profit. These terms in turn have a variety of definitions, depending on their context and the objectives of the authors. For instance, the IRS uses the term profit to describe earnings, whereas for the corporation the profit it reports is the amount left after taxes are taken out.

Non-routine earnings

The use of intellectual property generates non-routine profits. Those are often an order-of-magnitude greater than routine earnings. Non-routine profits are essential to warrant the high investments needed for high-technology industries.

Earnings manipulation

Some statistical models (e.g. based on Benford's law or Beneish M-score) are used in order to detect possible earnings manipulations (fraud).

Citations

References

  1. Robert G. Eccles, Robert H. Herz, E. Mary Keegan, David M. H. Phillips: The Value Reporting Revolution: Moving Beyond the Earnings Game; Price-Waterhouse-Coopers, 2001.
  2. John Hand and Baruch Lev (editors): Intangible Assets, Values, Measures. and Risks; Oxford University Press, 2003.
Wikipedia Source

This article was imported from Wikipedia and is available under the Creative Commons Attribution-ShareAlike 4.0 License. Content has been adapted to SurfDoc format. Original contributors can be found on the article history page.

business-terms
Want to explore this topic further?

Ask Mako anything about Earnings — get instant answers, deeper analysis, and related topics.

Research with Mako

Free with your Surf account

Content sourced from Wikipedia, available under CC BY-SA 4.0.

This content may have been generated or modified by AI. CloudSurf Software LLC is not responsible for the accuracy, completeness, or reliability of AI-generated content. Always verify important information from primary sources.

Report