The term ‘Earning Power’ should be used to mean the earnings
February 13, 2019
“The term ‘Earning Power’ should be used to mean the earnings that may reasonably be expected over a period of time in the future. Since the future is largely unpredictable, we are usually compelled to take either the current and past earnings as a guide, and to use these figures as a base in making a reasonable estimate of future earnings.” – Ben Graham, The Interpretation of Financial Statements, 1937
