What Is Income Before Extraordinary Items? How and Why Do Investors Use It?
Income before extraordinary items is income available to a company out of revenue earned after cost of goods sold, operating expenses, interest expenses (or income), and taxes are deducted. However, this doesn’t include extraordinary items, or incomes or expenses that are not expected to be recurring (for example, sale of part of the business or a piece of land).
Investors like to use this metric to compliment net income to see how much of the income earned was earned from recurring business operations, as opposed to one off transactions.
Read more about extraordinary items on investopedia.
Published: 6/03/2021
