Understanding the Earnings Curve

Earnings are basically the financial benefits of the performance of a company. It represents the gross profit of a company after all the expenses have been deducted. For an analytical study of various aspects of company operations many more technical terms are often used as EBITDA and EBIT. The two main accounting publications that deal with earnings by a company are called P&L (Profit and Loss) and GAAP (Generally Accepted Accounting Principles).


Earnings represent money going out of the company, less the money going in. This also represents the difference between total income from sales and the income from equity. Earnings per share (EPS) is a company’s total revenue per share divided by its average pay rate among holders of common stock. Other commonly used accounting terms are cost of good sold, accounts receivable, and accounts payable. They are also used to measure the value of acquired goods or services and to indicate the extent of cash flows.

Earnings represent the total income of a business minus the total expenses it incurs in providing its services or products to customers. This includes inventory charges, payroll, and special and employee taxes. One major area of difficulty for many businesses is the gender pay gap. This is the difference in pay between men and women in the same job category.