BNET Business Dictionary
Business Definition for: Earnings
- income or profit from a business, quoted gross or net of tax, which may be retained and distributed in part to the stockholders
- a sum of money gained from paid employment, usually quoted before tax, including any extra rewards such as s, allowances, or incentives.
- Also known as Pay
Wiktionary Definition for: Earnings
- Wages, money earned, income.
Additional Resources
- Everything You Need to Know About Earnings
- Earnings mean profit; it's the money a company makes. Often evaluated in terms of Earnings Per Share EPS, this is the most important indicator of a company's financial health. Earnings reports are released four times a year and are followed very closely by Wall Street. In the end, growing earnings...
- White papers 2003-05-23
- The World According to GAAP
- As earnings season gets underway and investors start listening to calls and reading reports, understanding how companies report earnings is critical. Earnings per share. Basic EPS. Diluted EPS. Adjusted net income diluted. GAAP earnings. Non-GAAP earnings. Enough already. Although confusion can be part of the learning process in investing, it...
- White papers 2005-04-25
- GAAP Versus Street Earnings: Making Earnings Look Higher and Smoother
- Street earnings are compared to GAAP earnings for over 29,000 annual observations and 100,000 quarterly observations from 1990 to 2000. Analysis is performed after separating firms by profitability and earnings volatility. Although there is little difference between the two types of earnings for firms with GAAP profits, firms with GAAP...
- White papers 2002-07-16
- Earnings Management and Cross Listing: Are Reconciled Earnings Comparable to US Earnings?
- This paper compares the characteristics of US GAAP earnings for US firms with reconciled earnings for non-US firms cross listing on US markets. It is found that the reconciled earnings for non-US firms differ systematically from US GAAP earnings for US firms, and are characterized by more evidence of smoothing,...
- White papers 2005-01-01
- Testing Explanations for the Difference Between I/B/E/S and GAAP Earnings
- This article investigates two explanations for differences between I/B/E/S and GAAP earnings. One explanation is I/B/E/S earnings represent an attempt by analysts to satisfy the valuation requirements of investors, while GAAP numbers are influenced by the requirements of efficient contracting. Another explanation is that GAAP earnings include reversals of prior...
- White papers 2004-01-01
- Stock Returns, Aggregate Earnings Surprises, and Behavioral Finance
- We study the stock market reaction to aggregate earnings news. Previous research shows that, for individual firms, stock prices react positively to earnings news but require several quarters to fully reflect the information in earnings. We find that the relation between returns and earnings is substantially different in aggregate data....
- White papers 2003-02-01
- The Link Between Earnings Conservatism and Balance Sheet Conservatism
- Defining earnings conservatism as the degree to which a firm's earnings are more timely in reflecting expected losses than gains in a given fiscal year, and balance sheet conservatism as the firm's market-to-book ratio at the beginning of the year, this report hypothesizes and finds: Earnings conservatism is negatively associated...
- White papers 2004-01-01
- eBay P/E Hits New Low
- OnlyEBAY submits: Even though EBAY's EBAY share price is still well above the low 20's it reached in the summer of 2006, the company's P/E ratio has continued to slide as earnings have continued to grow. EBAY is now trading at 17.5x TTM earnings, 14.7x 2008E earnings, and a lowly...
- External links 2008-06-24
- Earnings Quality and Stock Returns
- An exclusive focus on bottom-line income misses important information about the quality of earnings. Accruals the difference between accounting earnings and cash flow are reliably, negatively associated with future stock returns. Earnings increases that are accompanied by high accruals, suggesting low-quality earnings, are associated with poor future returns. This paper...
- White papers 2004-02-01
- Revenue Growth And Stock Returns
- From the executive summary: ‘Although analysts revise their forecasts of future earnings in response to revenue and earnings surprises, they are slow to incorporate all the information in their forecast revisions. In particular analysts underestimate the extent to which revenue and earnings surprises have permanent effects on future earnings. This...
- White papers 2002-05-01
- Earnings Management in Belgium: A Review of the Empirical Evidence
- This paper first discusses the empirical evidence on earnings management practices by Belgian companies. This review indicates that Belgian companies manage earnings to avoid declines in earnings or losses, to influence relations with external financiers and to reduce taxes. Belgian companies quoted on the Brussels Stock Exchange also report significantly...
- White papers 2006-01-04
- The Persistence and Pricing of the Cash Component of Earnings
- Following Sloan, numerous studies show that the cash component of earnings is more persistent than the accrual component of earnings. The study presented in this paper shows that the higher persistence of the cash component of earnings is attributable to net cash distributions to equity holders. This result holds despite...
- White papers 2004-11-01
- The Economic Implications of Corporate Financial Reporting
- This paper surveys 401 financial executives, and conduct in-depth interviews with an additional 20, to determine the key factors that drive decisions related to reported earnings and voluntary disclosure. The majority of firms view earnings, especially EPS, as the key metric for outsiders, even more so than cash flows. Because...
- White papers 2004-06-01
- Doing the Math: Operating Earnings Spark Controversy
- From the executive summary: ‘Researches indicate that there is a dispute over what expenses companies should be allowed to exclude and treat as special items' in their operating-earnings figures. Unlike operating income and net income, operating earnings are not clearly defined by Generally Accepted Accounting Principles GAAP. Technically, most of...
- White papers 2001-08-27
- Validating Simulated Earnings Histories
- In this paper, methods and data have been for use in validating simulated earnings histories. The ability to simulate realistic earnings histories is critical for any dynamic microsimulation model that seeks to analyze the implications of reforms in pension or social security policy. This paper describes earnings history validation data...
- White papers 2000-09-01
- Decomposing Changes in Deferred Tax Assets and Liabilities to Isolate Earnings Management Activities
- This paper provides evidence on the types of accounts that reveal earnings management activities. We build on Burgstahler and Dichev's (1997) evidence of earnings management to avoid an earnings decline and Phillips et al.'s (2003) findings that deferred tax expense can be used to detect such earnings management. In particular,...
- White papers 2003-01-01
- Understanding Pro-Forma Earnings
- There's a clever way in which companies fudge and fiddle with their earnings figures, and one should know about it. The Securities and Exchange Commission SEC will investigate companies suspected of trying to deceive investors in the pro-forma modification of earnings. Let's take a look at what pro-forma earnings are,...
- White papers 2005-06-17
- Pro Forma Earnings: Adding Value or Distorting Perception?
- This article is about the use of Pro Forma earnings that gained acceptance based on the argument that excluding one-time or special items, such as restructuring charges or goodwill amortization, yields an earnings number that is more useful for predicting future cash flows. Companies, however, are increasingly using pro forma...
- White papers 2003-03-01
- Corporate Earnings Track the Competitive Benchmark
- Earnings are the flow of value created by corporations. This paper concentrates on the concept called EBITDA earnings before interest, taxes, depreciation, and amortization. This measure captures the results of the substantive non-financial activities of corporations and corresponds to the rental price of capital multiplied by the quantity of capital....
- White papers 2003-12-01
- Earnings Management & Analysts
- The paper discusses the role of analysts in the field of earnings management. Analysts play an important role in managing deals in the corporate finance scenario. They receive guidance from quarterly and annual earnings of the company. In the context of earnings management, the paper examines the role played by...
- Presentations 2003-01-01
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