The Earnings figure is what the company has produced after all expenses have been deducted from Sales. It will be used to calculate the EPS and the PE Ratio. Then either held as Retained Earnings or paid as a Dividend.

At the end of an Accounting Period, a company reports its Net Earnings or Net Income, the last line in the Profit and Loss. To arrive at the Earnings figure, from Sales all the different expenses categories are deducted, Cost of Goods Sold, General and Administrative Expenses, Operating Expenses, Depreciation and Amortisation, Interest Expense and Taxes. Net Earnings is then used to pay a Dividend or be transferred to Shareholders Funds as Retained Earnings. The Net Earnings number is the basis for calculating Earnings per Share, which is calculated by dividing the Earnings number by the Number of Shares. Earnings is the critical number on the Profit and Loss.

0 views

Leave a Reply

Your email address will not be published. Required fields are marked *

Warren William

Meet the author behind Smartest-Data. Warren William has a career in Finance and Investments extending over 35 years, both on the Buy Side and Sell Side. His most recent roles include, developing Institutional Risk Management Programs for managing Equity and Fixed Income Risk.  Prior to this Warren William work in Alternative Investments, in Investment Management and as a Buy Side Equity Analyst. Warren William brings a wealth of knowledge and expertise to the table, providing in-depth analysis and commentary on the latest trends in the Stock Markets. Contact information: wwBLOG@smartest-data.blog or Telegram +393339034488

Welcome to
Smartest-Data

Smartest Data aims to be your go-to source for analysis and commentary on Investments, Personal Finance and the Global Stock Markets. The aim is to provide our readers with insightful and actionable information for independent minded Investors.  Dissecting  the daily avalanche of Data produced by the Stocks Market by using data Websites  and Apps available to people at home. Join us, to be Driven by Data to navigate the Investment universe markets and make better informed investment decisions.