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#cfa-level-1 #financial-reporting-and-analysis #non-recurring-non-operating-items #understanding-income-statement
Recurring pre-tax income from continuing operations represents the company's sustainable income and therefore should be the primary focus of analysis.
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Subject 6. Non-Recurring Items and Non-Operating Items
is to derive an effective indicator to predict future earnings and cash flows. Net income includes the impact of non-recurring items, which are transitory or random in nature. Therefore, net income is not the best indicator of future income. <span>Recurring pre-tax income from continuing operations represents the company's sustainable income and therefore should be the primary focus of analysis. Segregating the results of recurring operations from those of non-recurring items facilitates the forecasting of future earnings and cash flows. Generally, analysts should


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