Earnings

Calculation: Sales less all Costs and expenses

Example: The Round Number Company

Sales = 200; COS = 80; OpEx = 72; Finance = 8; Tax = 10

(In this example, the Adjustments cancel out)

     Net Income = 200 - 80 - 72 - 8 - 10 = 30

Earnings is the profit for the period after all costs and expenses have been paid.

“What do you mean by that?”

The term 'Earnings' is also used higher up the Income Statement: Earnings Before Interest and Tax, Earnings before Tax.

Outside North America, Earnings is more likely to be called Profit or Net Income or Net Profit.  See discussion at Operating Income

 

 

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Earnings

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