Owner earnings

Owner earnings are the amount of money a business has left over after it has paid all of its expenses and invested in its operations. This money is available for the owners or investors of the business to use as they wish.

Let's say you have a lemonade stand. You make $10 in a day selling lemonade, but you also had to spend $3 on lemons, $2 on sugar, $1 on cups, and $2 on wages for your helper. That leaves you with $2 in profit, which is the money you get to keep.

But, there's something else you need to think about: investment. You might want to use some of the profit to buy more ingredients for the next day, or improve your stand. These are necessary investments to keep your business going.

Owner earnings are the leftover money you have after you pay for all of your expenses and invest in your business. You can think of it like this: you have a piggy bank where you keep all the money that you make from your lemonade stand. That piggy bank represents your business. The money you put into it from your earnings is for investing in your lemonade stand (like buying more lemons and sugar). The money that's left over after you've paid expenses and invested in the future of the lemonade stand is owner earnings, which you can use for whatever you want.