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Investments glossary

Normalized Earnings

Normalized earnings are adjusted to remove the effects of seasonality, revenue and expenses that are unusual or one-time influences. Normalized earnings help business owners, financial analysts and other stakeholders understand a company’s true earnings from its normal operations. An example of this normalization would be to remove a land sale from a retail firm’s financial statements in which a large capital gain was realized, as selling products – not selling land – is the company’s real business.

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