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Definition of Earnings
In general, refers to a company's total sales less cost of sales and operating expenses, including interest and income tax.
Net income for the company during the period.
earnings of a firm as reported on its income statement.
A financial measure defined as revenues less cost of goods sold
EPS, as it is called, is a company's profit divided by its number of outstanding
Positive or negative differences from the consensus forecast of earnings by institutions
The ratio of earnings per share after allowing for tax and interest payments on fixed interest
The real flow of cash that a firm could pay out forever in the absence of any change in
earnings per share expressed as if all outstanding convertible securities
The tendency of portfolios of stocks with a low price-earnings ratio to
Shows the "multiple" of earnings at which a stock sells. Determined by dividing current
Accounting earnings that are retained by the firm for reinvestment in its operations;
How much profit a company made on each share of common stock this year.
Profits a company plowed back into the business over the years. Last Januaryâ€™s retained earnings, plus the net income or profit that a company made this year (which is calculated on the income statement), minus dividends paid out, equals the retained earnings balance on the balance sheet date.
The operating profit before deducting interest and tax.
The operating profit before deducting interest, tax, depreciation and amortization.
The residual earnings of the company.
Statement Retained Earnings
One of the basic financial statements; it takes the beginning balance of retained earnings and adds net income, then subtracts dividends. The Statement of Retained earnings is prepared for a specified period of time.
basic earnings per share (EPS)
This important ratio equals the net
diluted earnings per share (EPS)
This measure of earnings per share
earnings before interest and income tax (EBIT)
A measure of profit that
earnings per share (EPS)
See basic earnings per share and diluted earnings per share.
net income (also called the bottom line, earnings, net earnings, and net
price/earnings ratio (price to earnings ratio, P/E ratio, PE ratio)
This key ratio equals the current market price
Basic Earnings Power Ratio
Percentage of earnings relative to total assets; indication of how
Earnings per Share
A measure of the earnings generated by a company on a per
Price to Earnings Ratio (P/E, PE Ratio)
A measure of how much investors are willing to pay for each dollar
A companyâ€™s accumulated earnings since its inception, less any distributions to shareholders.
Statement of retained earnings
An adjunct to the balance sheet, providing more detailed information about the beginning balance, changes, and ending balance in
price-earnings (P/E) multiple (ratio)
Ratio of stock price to earnings per share.
earnings not paid out as dividends.
Roth IRA. An IRA account whose earnings are not taxable at all under certain
Abusive Earnings Management
The use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result.
Abusive Earnings Management
A characterization used by the Securities and Exchange
Net income adjusted to exclude selected nonrecurring and noncash items of reserve, gain, expense, and loss.
A measure of earnings that includes only the results of the primary operating
Cost Plus Estimated Earnings in Excess of Billings
Revenue recognized to date under the percentage-of-completion method in excess of amounts billed. Also known as unbilled accounts
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working
The active manipulation of earnings toward a predetermined target.
EBBS - Earnings before the bad stuff
An acronym attributed to a member of the Securities and
EBDDT - Earnings before depreciation and deferred taxes
This measure is used principally by
A term frequently used to describe earnings after the removal of the
Operational Earnings Management
Management actions taken in the effort to create stable
earnings before the effects of any earnings-management activities.
Reported net income with selected nonrecurring items of revenue or gain
Real Actions (Earnings) Management
Involves operational steps and not simply acceleration
Reported earnings that have had the after-tax effects of all material
Price / Earnings (P/E) Ratio
The ratio of price to earnings. Faster growing or less-risky firms typically have higher P/E ratios than either slower-growing or more risky firms.
Net profits kept to accumulate in a business after dividends are paid.
Result of a transaction that increases earnings per common share (e.g. by decreasing the
The tendency of stocks preferred by the dividend discount model to share certain equity
Average accounting return
The average project earnings after taxes and depreciation divided by the average
Also called financial leverage ratios, these ratios compare debt to total capitalization
A company that pays out all earnings per share to stockholders as dividends. Or, a company or
In investments, it represents earnings before depreciation , amortization and non-cash charges.
Cash flow coverage ratio
The number of times that financial obligations (for interest, principal payments,
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
Common stock ratios
Ratios that are designed to measure the relative claims of stockholders to earnings
Ratios used to test the adequacy of cash flows generated through earnings for purposes of
Debt-service coverage ratio
earnings before interest and income taxes plus one-third rental charges, divided
Result of a transaction that decreases earnings per common share.
The interest rate that the Federal Reserve charges a bank to borrow funds when a bank is
Payments from fund or corporate cash flow. May include dividends from earnings, capital
Dividend payout ratio
Percentage of earnings paid out as dividends.
earnings before interest and taxes (EBIT) divided by total assets.
Also called a residual claim, a claim to a share of earnings after debt obligation have been
Fixed-charge coverage ratio
A measure of a firm's ability to meet its fixed-charge obligations: the ratio of
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
Forward looking multiple
A truncated expression for a P/E ratio that is based on forward (expected)
Free cash flows
Cash not required for operations or for reinvestment. Often defined as earnings before
Security analysis that seeks to detect misvalued securities by an analysis of the firm's
Funds From Operations (FFO)
Used by real estate and other investment trusts to define the cash flow from
A money manager who seeks to buy stocks that are typically selling at relatively high P/E
A phase of development in which a company experiences rapid earnings growth as it produces
A bond on which the payment of interest is contingent on sufficient earnings. These bonds are
Interest coverage ratio
The ratio of the earnings before interest and taxes to the annual interest expense. This
A firm's deduction of the interest payments on its debt from its earnings before it calculates
Finance generated within a firm by retained earnings and depreciation.
For companies: Raw materials, items available for sale or in the process of being made ready for
Lynch & Co
Payment by a firm to its owners from capital rather than from earnings.
A phase of company development in which earnings continue to grow at the rate of the
Another name for price/earnings ratios.
The company's total earnings, reflecting revenues adjusted for costs of doing business,
Common stockholders' equity which consists of common stock, surplus, and retained earnings.
Operating cash flow
earnings before depreciation minus taxes. It measures the cash generated from
See Price/earnings ratio.
P/E ratio (PE ratio / multiple)
Assume XYZ Co. sells for $25.50 per share and has earned $2.55 per share this year; $25. 50 = 10
Generally, the proportion of earnings paid out to the common stockholders as cash dividends.
Shares of stock given to managers on the basis of performance as measured by earnings
Preferred shares give investors a fixed dividend from the company's earnings. And more
A security that shows ownership in a corporation and gives the holder a claim, prior to the
Indicator of profitability. The ratio of earnings available to stockholders to net sales.
The percentage of present earnings held back or retained by a corporation, or one minus the
Return on total assets
The ratio of earnings available to common stockholders to total assets.
Categories of risk used to calculate fundamental beta, including (1) market variability, (2)
Program by which a corporation buys back its own shares in the open market. It is usually
Signaling view (on dividend policy)
The argument that dividend changes are important signals to investors
Simple linear trend model
An extrapolative statistical model that asserts that earnings have a base level and
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