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A financial measure defined as revenues less cost of goods sold and selling, general, and administrative
expenses. In other words, operating and non-operating profit before the deduction of interest and income
taxes. Depreciation expenses are not included in the costs.
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold and selling, general, and administrative
expenses. In other words, operating and non-operating profit before the deduction of interest and income
taxes.
Earnings before taxes (EBT)
A financial measure defined as revenues less cost of goods sold and selling, general, and administrative
expenses. In other words, operating and non-operating profit before the deduction of income taxes.
Earnings per share (EPS)
E.P.S., as it is called, is a company's profit divided by its number of outstanding shares. If a company earned
$2 million in one year had 2 million shares of stock outstanding, its EPS would be $1 per share. In
calculating E.P.S., the company often uses a weighted average of shares outstanding over the reporting
term.
Earnings retention ratio
Plowback rate.
Earnings surprises
Positive or negative differences from the consensus forecast of earnings by institutions such as First Call or
I.B.E.S. Negative earnings surprises generally have a greater adverse affect on stock prices than the
reciprocal positive earnings surprise on stock prices.
Earnings yield
The 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. We often look at earning yields because it avoids the problem of zero earnings in the
denominator of the price/earning ratio.
EBIT
See: Earnings Before Interest and Taxes
EBITD
See: Earnings Before Interest, Taxes and Depreciation
EBITDA
See: Earnings Before Interest, Taxes, Depreciation and Amortization
EBT
See: Earnings Before Taxes
Economic assumptions
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