Investor Glossary-earningsInvestor Glossary-earningsInvestor Glossary-earningsInvestor Glossary-earningsInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Earnings

The HTML to link to this page
 

In everyday speech, earnings is often used interchangeably with income and profits to mean some positive financial increase. In investing, however, earnings is more likely to describe what is left over in a given accounting period after all revenues and gains, and all expenses and losses, have been totaled. Thus earnings per share means net income per share. As the "bottom line," earnings is the key measure of business success, and the price to earnings ratio is the best-known valuation measure of a stock. Yet earnings should not be the lone yardstick for measuring company results. Earnings does have the advantage of matching income and expense for a period and thus smoothing the irregularity of cash flows. But earnings is also subject to accounting's vagaries, which in a complex business world can lead to numbers that are more than a little theoretical. Earnings is also of little help in determining the value of new ventures, which may have few earnings initially but the potential to produce substantial cash flows in the future.



Rate this earnings definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: in escrow, balance sheet, current ratio, implied volatility, ex-dividend, APR, open position, reverse mortgage, deferred revenue, real GDP, wholly-owned subsidiary, inflation, Zero Cost Collar, Key Rate Duration, average price per share, VIX, limit order, labor relations, command economy, quality assurance, LIBOR, debt service coverage, FTSE, phantom income, 1031 exchange, ex-dividend date, per diem, stock split, stock market close, minority interest, cancelled check, covered put, dividends payable, 1035 exchange, class C shares, diluted share, required rate of return, margin rate, retained earnings, EBITDA, FICO score, 144a, deferred tax, risk management, option premium, annual return, 401a, irrevocable trust, liquidity ratio


Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
Investor Glossary Index >>> # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
©2004-2014 Investor Glossary - All rights reserved - Terms of Use