Normalized Earnings
Categories: Accounting, Metrics
This is Norm. And this is norMAL. You’re in the ebola abatement business. Each year, the government spends a few bucks on you just to keep you alive as a business, in case, well, you know, a few hundred million people’s faces start melting off.
So your earnings are usually here and here and here and here. But then, one year, after Miss Malaria’s high school biology class takes a field trip to study monkeys, bats, and beetles in caves in Central Ghana, well, business picks up.
So this year, with the gov having to spend a fortune on ebola abatement, you earn $9.42, and since world awareness has suddenly shot up the most popular Yahoo search term index, next year you still earn $5.17.
But then things quiet down, and life goes back to normal, where your earnings are, and you could plot some kind of line through them, and if someone asked you what normal earnings are in your little ebola abatement company, you could say that your normalized earnings are about $1.20.
Fortunately, making out with a Nigerian fruit bat is not normal, so you probably don’t have to worry about contracting ebola.