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25 January 2020

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Earnings typically refer to after-tax net income, sometimes known as the bottom line or a company's profits. Earnings are the main determinant of a company's share price, because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. Earnings are perhaps the single most important and most studied number in a company's financial statements. It shows profitability compared to analyst estimates, the company's own historical performance, and relative to its competitors and industry peers.
KEY TAKEAWAYS
Earnings refer to a company's profits in a given quarter or fiscal year.
Earnings are an important figure to use when analyzing a company's profitability.
A company's earnings are used in many common ratios.
It can be compared to analyst's earnings estimates, the company's past performance, or against peers within the same industry.
Earnings can have a large impact on stock price, and as a result the figure is subject to potential manipulation.

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