Earnings report

An earnings report is a document that a company produces, whether on an annual or quarterly basis. More specifically, it contains specific financial information about how much profit the company was able to make and its liabilities. Alternatively known as a profit and loss statement or income statement, it shows how the net income is earned after all of the expenses have been taken into account and subtracted from the total inflow of revenue. The main purpose of an earnings report is to show exactly how much a company has earned over a specific period of time. It also takes into account expenses which may be attributed to operating activities, as well as those which are incurred from non-operating activities.

Earning reports can be made either by using a Single Step method, or a Multi-Step approach. The former simply involves subtracting expenses from revenue, whereas the latter takes more factors into account, such as income earned from operations as well as tax deductions.

In the case of non-profit organizations, on the other hand, earning reports are not necessary. Financial statements come in the form of what is known as a statement of activities. This document simply shows how much has been received from benefactors and how much has been spent on operations and projects.

The earnings report is considered an important financial statement, just like the balance sheet. However, the difference between an earnings report and a balance sheet is basically the coverage. Balance sheets serve as statements for a particular point in time, whereas earning reports cover specific periods of time.

Comments
Leave a response

Leave a Response