Earnings

Definition

The net income of the business which is the difference between its revenues, costs and expenses, as shown on the Profit and Loss Statement.

What It Means

The business earnings indicate the profitability of operations and the amount the owners are getting in return for their investment in the business. Earnings are generally equated with the net income after taxes.

Most small business valuations focus on other income metrics, such as the seller’s discretionary cash flow.