Legal Definitions - operating earnings

Definition: Operating earnings refer to a company's income that is earned from its regular business operations, excluding any one-time or special items. It is calculated by subtracting operating expenses from revenue.

Example: If a company earns $1 million in revenue from selling its products and incurs $800,000 in operating expenses such as salaries, rent, and utilities, its operating earnings would be $200,000.

This metric is important for investors and analysts as it provides a clearer picture of a company's financial health and performance, without the impact of one-time events or non-operating activities. It helps in assessing the company's ability to generate profits from its core business operations.