Earnings refers to the overall contribution of a company to its stakeholders (such as stockholders, creditors or tax authorities). Earnings per share (EPS) is the measure of earnings per share (EPS) earned by a company in a given year. Earnings momentum is the rate at which companies earn profits. The sales and gross merchandise inventory (SPIL) measure the market value of products; market price level of stocks or equity; and the balance sheet measures balance of payments between debtors and lenders.
Earnings momentum is a key concept in measuring profitability and market health. The profitability and health of a company refer to the state of its operations, as seen from the perspective of investors. Companies’ earnings momentum measures the rate at which they earn net income and to a certain extent the level of net worth. Various other terms for the measures of earnings are EBITDA and EBIT, gross profit margin and gross profit percentage.
An example of a company’s financial measures is an income statement, balance sheet, cash flow statement, or business case. The income statement tells if a company is making money, the net income earned by the company, and the profitability of the company. The balance sheet provides information about the nature of the debts of the company. The business case gives details of assets and liabilities and the net worth (asset value less liabilities) of the company.