When analyzing a company's performance over a recent quarter or year, it is important to differentiate between operating and non-operating profit and loss. For example, if a company's bottom-line earnings per share is reported to be markedly higher this year than last year, but this is due to a one-time gain on investment securities, this should be excluded from the firm's operating income, in order to gain a better measure of how much the company's operations actually grew during the year.
Investment dictionary. Academic. 2012.
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