Accounting Earnings


DEFINITION of 'Accounting Earnings'

The amount of money a company has earned during a given period, usually a quarter or year, as reported based on proper accounting standards. Accounting earnings help to measure a company's profitability, but investors should consider not just earnings quantity, but also earnings quality, in evaluating a company's accounting earnings. Earnings quality considers whether earnings are repeatable, controllable and bankable.

BREAKING DOWN 'Accounting Earnings'

When a publicly traded company announces its accounting earnings, investors' reaction to the news will usually cause the stock's price to move. After releasing the earnings report, the company's management will discuss the results with investors in an earnings call. Generally accepted accounting principles (GAAP) allow accounting earnings to be calculated in a specific manner, while some accounting practices can be selected specifically for their impact on creating accounting earnings that support management goals, which may not always coincide with shareholder goals.

  1. Forward Looking

    A business slang term for predictions about future business conditions. ...
  2. Earnings Call

    A conference call between the management of a public company, ...
  3. Earnings Announcement

    An official public statement of a company's profitability for ...
  4. Quality Of Earnings

    The amount of earnings attributable to higher sales or lower ...
  5. Income Statement

    A financial statement that measures a company's financial performance ...
  6. Net Income - NI

    1. A company's total earnings (or profit). Net income is calculated ...
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  1. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  2. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  3. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  4. What does high working capital say about a company's financial prospects?

    If a company has high working capital, it has more than enough liquid funds to meet its short-term obligations. Working capital, ... Read Full Answer >>
  5. How can working capital affect a company's finances?

    Working capital, or total current assets minus total current liabilities, can affect a company's longer-term investment effectiveness ... Read Full Answer >>
  6. What can working capital be used for?

    Working capital is used to cover all of a company's short-term expenses, including inventory, payments on short-term debt ... Read Full Answer >>

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