Definition:
Other After Tax Adjustments refer to financial entries made to a company's net income after accounting for taxes, which include various non-operating or non-recurring items. These adjustments can include gains or losses from discontinued operations, extraordinary items, or changes in accounting principles that affect the net income.
Examples
Examples of Other After Tax Adjustments include the sale of a business segment, restructuring charges, or the impact of a change in tax laws that affects deferred tax assets or liabilities.
Formula:
There is no specific formula for Other After Tax Adjustments as they are unique to each company's financial situation and are calculated based on the specific items being adjusted.
How to use the metric:
This metric is used to provide a clearer picture of a company's ongoing operational performance by excluding non-recurring or non-operational items from net income. Analysts and investors use it to assess the core profitability of a business.
Limitations:
The main limitation is the potential for manipulation, as companies might classify recurring expenses as non-recurring to inflate their operational performance. Additionally, these adjustments can vary significantly between companies, making comparisons difficult.
Applies to:
This metric is applicable across various industries, particularly those with frequent non-recurring transactions, such as manufacturing, technology, and retail, where companies might regularly restructure or divest parts of their business.
Doesn't apply to:
Industries with highly stable and predictable operations, such as utilities or certain service sectors, may find this metric less relevant, as they typically have fewer non-recurring items affecting their financial statements.
Summary:
Other After Tax Adjustments are financial entries made to reflect non-operating or non-recurring items in a company's net income after taxes. They help provide a clearer view of a company's core operational performance but can be subject to manipulation and vary widely between companies. This metric is particularly useful in industries with frequent non-recurring transactions.
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Financial data by
Financial data provided by FactSet is standardized for consistency across companies, industries, and countries. Results may differ from original reports due to adjustments based on global accounting standards and methodologies.