Quality Of Earnings

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Dictionary Says

Definition of 'Quality Of Earnings'

The amount of earnings attributable to higher sales or lower costs rather than artificial profits created by accounting anomalies such as inflation of inventory.
Investopedia Says

Investopedia explains 'Quality Of Earnings'

Quality of earnings is considered poor during times of high inflation. Also, earnings that are calculated conservatively are considered to have higher quality than those calculated by aggressive accounting policies.

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