To determine a company's sustainable earning power, an analyst needs to first determine the recurring component of the current period's accounting income by excluding nonrecurring components of accounting income. Such adjusted earnings are often referred to as:
A) core earnings.
B) permanent earnings.
C) basic earnings.
D) operating earnings.

Question

Quizplus · Accepted Answer

Adjusted earnings that exclude nonrecurring components of accounting income are typically referred to as "core earnings." "Permanent earnings" is not a commonly used term in financial analysis, "basic earnings" refers to the net income attributable to each share of common stock, and "operating earnings" typically refers to income earned from a company's primary business activities.

To Determine a Company's Sustainable Earning Power, an Analyst Needs