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vii. Net Nonrecurring Income
Net Nonrecurring Income also integrates all revenue and expenses which are deemed nonrecurring, i.e. which are rare, unpredictable and unlikely to occur again in the future.
When examining a company’s income statement, you always need to pay careful attention to this ratio since it may happen that a firm tries to conceal recurring operating losses by labeling them as nonrecurring. If such is the case, then you will have to reintegrate these losses within the operating cycle (EBIT or EBITDA) in order to get a more accurate picture of the company’s ability to generate wealth.