

Underlying Profit

Underlying Profit Definition

A profit measure a company uses to provide a more meaningful analysis of its performance. It may be used for business process planning instead of the operating profit reported for accounting purposes. While operating profit is a defined concept, underlying profit is calculated by the company as it sees fit. Its goal is to represent management's estimate of the long-term earning power of the company. When calculating underlying profit, temporary disturbances, unusual circumstances or one-time events are excluded from the profit.

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