Earnings

Aug 23, 2021 Uncategorized

Earnings are the underlying advantages of the performance of a company. The earnings is the amount by which corporate tax is payable. It is the profit or loss obtained from the operations of a business in respect of the period during which they had been performed. For a complete analysis of the aspects of corporate finance many other more technical terms are often used as EBITDA and EBIT. They are used for different purposes like tax benefit, liquidity etc.

Earnings

Generally speaking earnings refers to the income from the operation of the business. This is generally measured in terms of gross profit, net profit, or gross margin. It includes both profits obtained from selling the products and services and the profits made on the assets of the firm. All these are under the head company income statement.

Many accounting systems provide measures of earnings called gross profit, operating profit, and net profit. A particular accounting system may decide to use one of the above named measures of earnings for the calculation of the income of a company. Usually when an enterprise is established it has low earnings. As the enterprise grows older the earnings rise. It is through the year that the average earnings per employee crosses the normal level and then be calculated as a measure of earnings per employee and accordingly used for the year-end statement.

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