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Earnings |
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EarningsThe total amount earned, usually by a worker as wages, or by a firm as profits.EarningsNet income for the company during a period.EarningsThe annual profits of a company after deduction of tax, dividends to preference shareholders and bondholders. Earnings are usually expressed on a per-share basis (e.g. 7p), and the earnings per share (EPS) figure is calculated by dividing total earnings by the average number of shares in issue for the relevant accounting period.E.g. earnings of £2m, with 10m shares in issue would give an EPS of 20pYou may see earnings used in several ways:Reported earnings: the figure in the company's accountsUnderlying earnings: the figure derived from reported earnings by excluding any one-off items (e.g. profit from the sale of land which is not part of the company's normal business)Diluted earnings: earnings after adjustment has been made for shares that may be issued in the future if holders of options, warrants and convertibles choose to exercise their rights.Similar MatchesFully diluted earnings per sharesFully diluted earnings per sharesEarnings per share expressed as if all outstanding convertible securities and warrants have been exercised. Accounting earningsAccounting earningsEarnings of a firm as reported on its income statement. Earnings yieldEarnings yieldThe ratio of earnings per share, after allowing for tax and interest payments on fixed interest debt, to the current share price. The inverse of the price-earnings ratio. It is the total twelve months, earnings divided by number of outstanding shares, divided by the recent price, multiplied by 100. The end result is shown in percentage terms. We often look at earnings yield because this avoids the problem of zero earnings in the denominator of the price-earning ratio. Retained earningsRetained earningsThe proportion of a company's profits after tax which are not paid out as dividends but reinvested in the company. Taxable earningsTaxable earningsThe amount of an individual's annual income on which tax is payable defined as:Taxable earnings = Income - Reliefs - AllowancesThe main reliefs are pension contributions and donations to charity. The main allowances are the 'personal allowance' which every individual has (£4,615 for people under 65 in 2003-2004) and the Married Couples Allowance for couples where one spouse is 65 or over.So someone with Income of £20,000 who has made pension contributions in the year of £1,000 will have Total Income of £19,000, and his Taxable Income will be £19,000 less a personal allowance of £4,615 = £14,385.The amount of tax he has to pay will be determined by the tax bands in operation in the year in question. For 2003-2004, the bands are:£1-£1,960: tax rate is 10% (starting rate) - tax on band is £196£1,961-£30,500: tax rate is 22% (basic rate) - tax on band is £6,278.58Over £30,500: tax rate is 40% (higher rate) Further Suggestionsearnings per shareprice earnings ratio (P/E ratio) Earnings retention ratio Earnings momentum net relevant earnings band earnings Retained earnings adjusted earnings Earnings response coefficient upper earnings level earnings factor Earnings before interest, taxes, and depreciation (EBITD) Primary earnings per (common) share price earnings growth factor normalised earnings Earnings before taxes (EBT) Earnings before interest after taxes (EBIAT) Earnings price ratio earnings cap State Earnings Related Pension Scheme lower earnings limit Normalized earnings Quality of earnings Earnings before interest and, taxes (EBIT) earnings yield |
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