At this link: http://www.thestreet.com/quote/ABX/details/company-profile.html Under per share data: Earnings: 3.36 Sales:14.14
Now Earnings are made up of sales and other stuff. So how comes sales are more than earnings?
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2A google of earnings would have clarified the whole idea to you rather than posting this question. – DumbCoder Jan 22 '13 at 16:52
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"Earnings are made up of sales" MINUS other stuff. The "minus" part makes earnings less than sales. – Tom Au Jun 24 '14 at 1:24
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Sales are how much product a company sold. If a company sells 1,000,000 widgets at $100 a widget then the company as $100,000,000 in sales. Earnings are how much money the company has left after paying all the bills to make, market and sell that product. Thus, companies can often have sales much higher than their earnings because the sales aren't taking into account all the production costs incurred to make the product, market the product, ship the product, etc. Thus, if each widget costs $99 to make, market and ship then the company has earnings of $1,000,000 as it had to spend $99,000,000 to make, market and ship the product.
EBITDA would give a few examples of things factored into earnings like interest, taxes, depreciation, and amortization that can change the numbers.
When my daughter thought to get into the donut business, I asked what she'd sell the for. $1 each. She sold 12 dozen the first weekend.
- Sales = $144
- Cost of goods = $54 (flour sugar, etc)
- Profit = $90
Profit would always be less than the total sales (let's ignore odd situations that contradict this, such as an IP / patent sale) as there's the cost of goods, and for most companies, wages, etc.
answered Jan 22 '13 at 17:41
JTP - Apologise to Monica♦JTP - Apologise to Monica
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Simply put
Profit (aka Earnings) = Sales - Cost
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1Profit and earnings are often synonymous. Perhaps you meant
Profit = Revenue - Cost. – Chris W. Rea Jan 23 '13 at 19:21
