Exceptional item
AccountingA material one-off gain or loss disclosed separately from ordinary operations.
In plain terms
Applying a P/E multiple to earnings inflated by one of these is a classic way to overpay.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Net profit
AccountingAlso called: Profit after tax, PAT, Bottom line
The bottom line of the income statement — what remains for shareholders after all costs, interest, tax and exceptional items.
In plain terms
Check what is inside it before applying any multiple. A one-off gain from selling a factory spends once and inflates the figure for exactly one year.