Normalised earnings

• Example


  E.g. hairdressers selling hair dryers and the seats that they use isn’t a part of the normal scheme but isn’t ethical and doesn’t paint a true picture of the business’ earnings because it’s not the normal revenue that they get from hair cuts and normal revenue
• Overall


  refers to the process of removing one-off or unusual items from the balance sheet to show the true earnings of a company

  Earning that have been adjusted to take into account changes in the economic cycle or to remove one off or unusual items that will affect profitability e.g. remove a land sale from a retailers financial statement as selling products not land is a retailers core business OR one off expenses such as lawyers fees