HOME

TheInfoList



OR:

Earnings are the net benefits of a
corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...
's operation. Earnings is 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 EBIT, Ebit or ebit may refer to: *EBIT, or Earnings before interest and taxes, in finance *EBIT, or Electron beam ion trap, in physics *An ebit (quantum state), a two-party quantum state with quantum entanglement Quantum entanglement is the ph ...
(earnings before interest and taxes) and
EBITDA A company's earnings before interest, taxes, depreciation, and amortization (commonly abbreviated EBITDA, pronounced , , or ) is a measure of a company's profitability of the operating business only, thus before any effects of indebtedness, stat ...
(earnings before interest, taxes, depreciation, and amortization). Many alternative terms for earnings are in common use, such as
income Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. Fo ...
and
profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory inter ...
. These terms in turn have a variety of definitions, depending on their context and the objectives of the authors. For instance, the
IRS The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory tax ...
uses the term profit to describe earnings, whereas for the corporation the profit it
report A report is a document that presents information in an organized format for a specific audience and purpose. Although summaries of reports may be delivered orally, complete reports are almost always in the form of written documents. Usage In ...
s is the amount left after taxes are taken out.


Non-routine earnings

The use of
intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, co ...
generates non-routine profits. Those are often an order-of-magnitude greater than routine earnings.John Hand and Baruch Lev (editors): Intangible Assets, Values, Measures. and Risks; Oxford University Press, 2003. Non-routine profits are essential to warrant the high
investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing is ...
s 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

Business terms