Earnings are the underlying result of the operating profit of a company. Earnings per share (EPS) is the measure of earnings per share. The term ‘EBIT’ stands for enterprise value addition. Some other terms used in accounting are EBITDA and EBIT.

Net income is the difference between earnings and net income. The gross profit, or net income, less the expenses is usually called the gross profit. A company’s net income is the income effect of its operations less the capital gains and other miscellaneous taxes.

EBIT/EBITDA are used to calculate the profit margin or excess profitability for any company. These terms are not the same as gross profit since EBIT/EBITDA does not include the tax effect from the purchase of stock. EPS includes the effect of the retail price index (PSI) less the federal oil and gas tax and excludes other taxes. Both gross profits and net income are reported under the heading that they are ‘earned profits’. Common shareholders are the owners of the corporation. The corporation’s profit and earnings come from the operations of the business and are reported to them in their annual reports. The shareholders decide how the income is to be distributed among them and are able to vote on certain matters affecting the company’s earnings and profit.