Finance: What are normalized earnings?

Normalized earnings are, more or less, the average of what you typically earn. Picture a bell curve. Zoom in on the middle of it. There you go.

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Transcript

00:21

abatement business Each year the government spends a few bucks

00:25

on you Just keep you alive Is a business in

00:28

case Well you know a few hundred million peoples faces

00:31

start melting off like you know that scene in indiana

00:34

jones you know the good ones so your earnings are

00:38

usually here and here and here and here a buck

00:41

a buck twelve twenty three twenty four years I'm like

00:43

that But then one year after miss malaria's high school

00:46

biology class takes a field trip to study monkeys bats

00:50

and beetle crap in caves in central ghana Well your

00:54

business picks up So this year when the gove is

00:57

having to spend a fortune on ebola abatement you were

01:00

nine dollars and forty two cents a share And since

01:04

world awareness has suddenly shot up the most popular yahoo

01:07

search term index that thing well next year you'll still

01:11

learn five seventeen to share even though most the ebola

01:14

is pretty much gone now But then things quiet down

01:16

in life goes back to normal where your earnings are

01:21

you know normal and you could plot some kind of

01:23

line through them And if someone asked you what normalized

01:27

earnings are in your little ebola abatement company well you

01:30

could say that your normalized earnings are in about a

01:34

buck twenty Well fortunately making out with the nigerian fruit

01:37

bat is not normal so you probably don't have to 00:01:40.539 --> [endTime] worry about contracting ebola Ooh