FINA 470 Chapter Notes - Chapter 6: Net Income, Comprehensive Income, Earnings Before Interest And Taxes

• School: USC, SC, Carolina, South Carolina
• Department: Finance
• Course: FINA 470
• Professor: austin

Document Summary

Items creating differences between net: net income is the excess of the revenues and gains of the company over the expenses and losses of the company. Net income often is called the (cid:862)(cid:271)otto(cid:373) li(cid:374)e,(cid:863) although that is a (cid:373)is(cid:374)o(cid:373)e(cid:396) (cid:271)e(cid:272)ause (cid:272)e(cid:396)tai(cid:374) u(cid:374)(cid:396)ealized holding gains and losses are charged directly to equity and bypass net income. Comprehensive income is the ulti(cid:373)ate (cid:862)(cid:271)otto(cid:373) li(cid:374)e(cid:863) i(cid:374)(cid:272)o(cid:373)e number. Continuing income is a measure of net income earned by ongoing segments of the company. Examples of operating income include product sales, cost of product sales, and selling, general, and administrative costs. Non-operating income includes all components of income not included in operating income. Examples of non-operating income include interest revenue and interest expense: operating versus non-operating and recurring versus non-recurring are distinct dimensions of classifying income. While there is overlap across selected items, these dimensions reflect different characteristics of business activities.