You may have a 9-to-5 job. Or maybe you work at a company or restaurant for the bulk of your week. This is your primary job, where most of the money you earn derives.
But this is America, and things aren't cheap. You may have a second job dressing up as Teenage Mutant Ninja Turtles at kids' birthday parties. Times is hard.
Treat yourself like a business: When you add up all of your money for the week, you have your “revenue.” The money from your primary job represents your core revenues.
Now, subtract all of the ongoing expenses from that core job, and any nonrecurring charges that might impact your period of work (that would write off as an expense). Now you have your core earnings.
For accountants, core earnings are a very important number on a Profit and Loss statement. However, it's not a recognized feature of GAAP standards. It's really just a metric that allows managers and investors to know how profitable the primary part of a business is at a specific point in time.
You’ll hear the term core earnings quite a bit around earnings season. A company might report earnings per share that underwhelm investors. However, an analyst will point to “core earnings per share” which doesn't take into consideration nonrecurring charges.
Related or Semi-related Video
Finance: What are normalized earnings?5 Views
Finance allah shmoop what are normalized earnings All right this
is norm or it's supposed to be We just couldn't
get the licensing rights from him So this is our
public domain version of norm from cheers Sorry And this's
normal that's a bell curve Yeah you're in the ebola
abatement business Each year the government spends a few bucks
on you Just keep you alive Is a business in
case Well you know a few hundred million peoples faces
start melting off like you know that scene in indiana
jones you know the good ones so your earnings are
usually here and here and here and here a buck
a buck twelve twenty three twenty four years I'm like
that But then one year after miss malaria's high school
biology class takes a field trip to study monkeys bats
and beetle crap in caves in central ghana Well your
business picks up So this year when the gove is
having to spend a fortune on ebola abatement you were
nine dollars and forty two cents a share And since
world awareness has suddenly shot up the most popular yahoo
search term index that thing well next year you'll still
learn five seventeen to share even though most the ebola
is pretty much gone now But then things quiet down
in life goes back to normal where your earnings are
you know normal and you could plot some kind of
line through them And if someone asked you what normalized
earnings are in your little ebola abatement company well you
could say that your normalized earnings are in about a
buck twenty Well fortunately making out with the nigerian fruit
bat is not normal so you probably don't have to 00:01:40.539 --> [endTime] worry about contracting ebola Ooh
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