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Financial Terms | |
Economic earnings |
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Definition of Economic earningsEconomic earningsThe real flow of cash that a firm could pay out forever in the absence of any change in
Related Terms:Abusive Earnings ManagementThe use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result. Abusive Earnings ManagementA characterization used by the Securities and Exchange Accounting earningsearnings of a firm as reported on its income statement. Adjusted EarningsNet income adjusted to exclude selected nonrecurring and noncash items of reserve, gain, expense, and loss. basic earnings per share (EPS)This important ratio equals the net Basic Earnings Power RatioPercentage of earnings relative to total assets; indication of how Classical MacroeconomicsThe school of macroeconomic thought prior to the rise of Keynesianism. ![]() Core EarningsA measure of earnings that includes only the results of the primary operating Cost Plus Estimated Earnings in Excess of BillingsRevenue recognized to date under the percentage-of-completion method in excess of amounts billed. Also known as unbilled accounts diluted earnings per share (EPS)This measure of earnings per share EarningsNet income for the company during the period. EarningsIn general, refers to a company's total sales less cost of sales and operating expenses, including interest and income tax. earnings before interest and income tax (EBIT)A measure of profit that Earnings before interest and taxes (EBIT)A financial measure defined as revenues less cost of goods sold Earnings before interest and taxes (EBIT)The operating profit before deducting interest and tax. Earnings before interest, taxes, depreciation and amortization (EBITDA)The operating profit before deducting interest, tax, depreciation and amortization. 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 Earnings ManagementThe active manipulation of earnings toward a predetermined target. Earnings per ShareA measure of the earnings generated by a company on a per Earnings per share (EPS)EPS, as it is called, is a company's profit divided by its number of outstanding earnings per share (EPS)See basic earnings per share and diluted earnings per share. Earnings per share of common stockHow much profit a company made on each share of common stock this year. Earnings retention ratioPlowback rate. Earnings surprisesPositive or negative differences from the consensus forecast of earnings by institutions Earnings yieldThe ratio of earnings per share after allowing for tax and interest payments on fixed interest EBBS - Earnings before the bad stuffAn acronym attributed to a member of the Securities and EBDDT - Earnings before depreciation and deferred taxesThis measure is used principally by Economic assumptionseconomic environment in which the firm expects to reside over the life of the economic components modelAbrams’ model for calculating DLOM based on the interaction of discounts from four economic components. Economic defeasanceSee: in-substance defeasance. Economic dependenceExists when the costs and/or revenues of one project depend on those of another. Economic exposureThe extent to which the value of the firm will change because of an exchange rate change. Economic incomeCash flow plus change in present value. economic integrationthe creation of multi-country markets Economic lifeThe period over which a company expects to be able to use an asset. economic order quantityOrder size that minimizes total inventory costs. Economic order quantity (EOQ)The order quantity that minimizes total inventory costs. economic order quantity (EOQ)an estimate of the number economic production run (EPR)an estimate of the number Economic rentsProfits in excess of the competitive level. Economic riskIn project financing, the risk that the project's output will not be salable at a price that will Economic surplusFor any entity, the difference between the market value of all its assets and the market Economic unionAn agreement between two or more countries that allows the free movement of capital, Economic Value Added (EVA)Operating profit, adjusted to remove distortions caused by certain accounting rules, less a charge economic value added (EVA)a measure of the extent to which income exceeds the dollar cost of capital; calculated economic value added (EVA)Term used by the consulting firm Stern Stewart for profit remaining after deduction of the cost economically reworkedwhen the incremental revenue from the sale of reworked defective units is greater than EconomicsThe study of the allocation and distribution of scare resources among competing wants. Fully diluted earnings per sharesearnings per share expressed as if all outstanding convertible securities Leading economic indicatorseconomic series that tend to rise or fall in advance of the rest of the economy. Low price-earnings ratio effectThe tendency of portfolios of stocks with a low price-earnings ratio to MacroeconomicsThe study of the determination of economic aggregates such as total output and the price level. MicroeconomicsThe study of firm and individual decisions insofar as they affect the allocation and distribution of goods and services. net income (also called the bottom line, earnings, net earnings, and netoperating earnings) Operating EarningsA term frequently used to describe earnings after the removal of the Operational Earnings ManagementManagement actions taken in the effort to create stable Premanaged Earningsearnings before the effects of any earnings-management activities. price-earnings (P/E) multiple (ratio)Ratio of stock price to earnings per share. Price / Earnings (P/E) RatioThe 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. Price/earnings ratio (PE ratio)Shows the "multiple" of earnings at which a stock sells. Determined by dividing current price/earnings ratio (price to earnings ratio, P/E ratio, PE ratio)This key ratio equals the current market price Price to Earnings Ratio (P/E, PE Ratio)A measure of how much investors are willing to pay for each dollar Pro-Forma EarningsReported net income with selected nonrecurring items of revenue or gain Real Actions (Earnings) ManagementInvolves operational steps and not simply acceleration Retained earningsAccounting earnings that are retained by the firm for reinvestment in its operations; RETAINED EARNINGSProfits a company plowed back into the business over the years. Last January’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. Retained earningsThe residual earnings of the company. Retained earningsA company’s accumulated earnings since its inception, less any distributions to shareholders. retained earningsearnings not paid out as dividends. Retained EarningsNet profits kept to accumulate in a business after dividends are paid. Roth IRA. An IRA account whose earnings are not taxable at all under certaincircumstances. Statement of retained earningsAn adjunct to the balance sheet, providing more detailed information about the beginning balance, changes, and ending balance in Statement Retained EarningsOne 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. Supply-Side EconomicsView that incentives to work, save, and invest play an important role in determining economic activity by affecting the supply side of the economy. Sustainable EarningsReported earnings that have had the after-tax effects of all material capitalA very broad term rooted in economic theory and referring to equityRefers to one of the two basic sources of capital for a business, the Tilted portfolioAn indexing strategy that is linked to active management through the emphasis of a Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |