Earnings talk: What the financial
Quarterly and annual financial reports feature a language of their
own. Here are some definitions of the more commonly used terms you’ll
Revenues: Total dollar amount
received for goods and services provided.
Operating earnings: Revenues
minus cost of sales and other operating expenses. This figure gives
insight to how well a company’s ongoing operations performed.
Net earnings: Operating earnings
minus taxes, interest and other non-operating expenses.
Earnings per share: Net earnings
divided by the number of shares outstanding. It’s used to
measure a company’s profitability.
Non-recurring item: A one-time
event, either a charge or a gain, that occurs for unusual reasons
and is not representative of normal, ongoing operations. Examples
include the cost of acquiring another business or the gain from
selling a business.