00:03
Sustainable earnings refers to the earnings which the firm is expected to earn in the future on a continuous basis i .e.
00:24
Income from operations excluding all income or losses on a non -recurring nature and taxes.
00:33
The investors mainly focus on the sustainable earnings rather than the net income or loss reported in financial.
00:40
The sustainable earnings therefore can be calculated by adding back the non -recurring items to income from operations.
00:51
So here sustainable earnings year 1, year 2, year 3.
01:08
So here income from operations for the first year negative 14414 for year 2 31801 and for year 3 3182.
01:27
Now we have to add expenses non -recurring in this impairment of pr for the first year 1169 negative for the year 2 1314 and for the year 3 is none.
01:56
Then restructuring charges that is for year 1 negative 1259 for year 2 13973 for year 3 it is nothing and then here we have to add amortization of pr.
02:22
So for the year 1 1136 for year 2 568 for year 3 384.
02:29
Now we can say here sustainable earnings.
02:37
So the sustainable earnings for the year 1 is negative 15706 for year 2 negative 15946 and for the year 3 3566.
02:54
Now comparison of net income with sustainable earning...